U.S. Wholesale Prices Rise Most in 5 Months

Washington, Rabi’I 15, 1438, Dec 14, 2016, SPA — U.S. wholesale prices rose at the fastest pace in five months in November, pushed higher by retailers’ profit margins and more expensive food, the government reported Wednesday.
The Labor Department said its producer price index (PPI), which measures price changes before they reach the consumer, rose 0.4 percent last month, the largest increase since June, after being flat in October. The index is up 1.3 percent in the past year, the most in two years, but still a low figure historically, suggesting that overall inflation remains tame.
Excluding volatile energy and food prices, core PPI rose 0.4 percent last month and 1.6 percent in the last year.
A 0.5 percent increase in the cost of services—specifically, profit margins for clothing stores and gasoline stations—accounted for more than 80 percent of the rise in PPI last month. The increase, which followed a 0.3 percent drop in October, was the biggest since January.
Food prices surged 0.6 percent, pushed higher by more expensive fruits. Energy costs fell 0.3 percent, as wholesale gasoline costs dropped 2.9 percent, suggesting gasoline costs could fall in the coming weeks despite recent gains related to an output cut by producers.
The report adds to recent signs that inflation is firming, as Americans pay more for housing and medical care. Consumer prices, which are measured separately, rose 1.6 percent in October from a year ago, below the Federal Reserve (Fed) 2-percent target but still the largest gain in more than two years. Consumer inflation, excluding volatile energy and food, is up 2.1 percent in the past year.
Signs of slightly higher inflation are one reason the Fed is widely expected to raise interest rates Wednesday for the first time in a year.
–SPA
21:40 LOCAL TIME 18:40 GMT