Producer prices post big annual gain
Prices paid to U.S. producers posted a record annual increase of almost 10% in November, a surge that will sustain a pipeline of inflationary pressures well into 2022.
The producer price index for final demand increased 9.6% from a year earlier and 0.8% from the prior month, Labor Department data showed Tuesday. Both advances topped economists’ forecasts.
The annual advance was the largest in figures back to 2010. Stock-index futures extended losses as the data reinforced expectations that Federal Reserve policy makers will tighten monetary policy next year.
Excluding the volatile food and energy components, the so-called core PPI increased 0.7% and was up by a record 7.7% from a year ago.
Prices of goods and services both advanced last month. The report captures changes in prices paid to producers as well as margins received by wholesalers and retailers.
Materials costs have risen rapidly this year amid transportation bottlenecks, robust demand, and labor constraints. Many businesses have successfully passed those added costs on to customers through higher prices, and the latest report suggests additional consumer price increases in the coming months.
Data out last week showed the consumer price index rose 6.8% last month from a year ago, the fastest annual pace in nearly 40 years.