Wholesale prices rose more than expected in November, dampening hopes that inflation could be heading lower, according to a Labor Department report on Friday.
The producer price index, a measure of what companies get for their products in the pipeline, rose 0.3% for the month and 7.4% from a year ago. Economists polled by Dow Jones even saw an increase of just 0.2%. Excluding food and energy, core PPI rose 0.4%, also versus estimates of 0.2%.
Stocks fell sharply following the report, with futures tied to the Dow Jones Industrial Average down more than 150 points after earlier showing a positive opening on Wall Street. Treasury yields are moving higher.
The withdrawal comes amid other signs that price increases are at least slowing from rates that have put inflation at its highest level in more than 40 years. However, Friday's data, which tends to be a key indicator of underlying price pressures, showed that inflation remained a long-term obstacle.
This is the third month in a row that the PPI rose 0.3%. On an annual basis, the increase represented a decline from the 11.7% peak that hit in March, but was still well ahead of pre-pandemic rates going back at least to 2010.
The increase occurred despite a 3.3% decrease in energy costs. This was offset by a similar 3.3% increase in the food index. The trade index rose 0.7%, while transport and warehousing fell 0.9%.
Excluding food, energy and trade services, PPI rose 0.3% from a month ago and rose 4.9% on an annual basis, the lowest since April 2021.
Services inflation picked up in the month, rising 0.4% after rising just 0.1% in the previous month. A third of the increase came from the financial services industry, where prices jumped 11.3%. It was somewhat offset by a sharp decline in passenger transport costs, which fell 5.6%.
On the goods side, the index rose just 0.1%, a sharp decline from October's 0.6% gain. The modest increase came despite a 38.1% acceleration in prices for fresh and dried vegetables. Prices moved higher across various food categories even as the petrol index fell 6%.
