Wholesale prices experienced a modest increase in November, with the rise coming in below market expectations, as consumer spending remained robust during the same period. According to the latest economic data from the Bureau of Labor Statistics, the producer price index (PPI), which measures the final demand prices that producers receive, rose by just 0.2% for the month. This figure fell short of the Dow Jones consensus forecast, which anticipated a 0.3% increase, although it was slightly higher than the previous month’s increase.
When food and energy prices are excluded, the core PPI remained unchanged, diverging from predictions of a 0.2% rise. Despite the softer monthly readings, the year-over-year headline PPI reported a 3% increase, significantly above the Federal Reserve’s target of 2%. The core PPI, which excludes trade services, saw a 3.5% annual gain, marking the most significant 12-month increase since March 2025.
The rise in wholesale prices was primarily driven by a 0.9% increase in goods prices, with over 80% of this attributed to a notable 4.6% surge in energy prices. Prices for services, however, remained flat during the period.
On the consumer front, November retail sales grew by 0.6%, according to seasonally adjusted figures from the Commerce Department. This increase surpassed economists’ expectations, which had predicted a more modest 0.4% rise. Excluding the automotive sector, sales still showed a healthy 0.5% increase, exceeding the anticipated 0.3% gain.
The broad-based gains in retail were evident across various sectors, with motor vehicle and parts dealers, building material and garden centers, gas stations, sporting goods stores, and other miscellaneous outlets all reporting sales growth exceeding 1%. Year-over-year, retail sales experienced a 3.3% increase, outpacing the 2.7% rise in the consumer price index for the same month.
Despite the encouraging retail numbers, the Bureau of Labor Statistics noted ongoing delays in the release of PPI data due to last year’s government shutdown, with retail sales data also lagging.
In response to the economic data, financial markets exhibited little reaction, with stock futures hinting at lower openings and Treasury yields remaining largely unchanged. Traders have continued to factor in minimal chances of a Federal Reserve interest rate hike at its upcoming meeting later this month.
