US DATA
Producer price inflation picked up by more than expected in November, at +0.4% (0.38% unrounded) M/M vs 0.3% prior (0.25%, reflecting an upward revision from 0.20% initial). The core indices were cooler though: ex-food/energy registered 0.2% (from 0.3% prior, in line with expectations) and the more important ex-food/energy/trade services printed an 18-month low of 0.05% unrounded (0.34% prior, and vs 0.2% expected).
- Even the underlying details of the headline figure were fairly benign: the BLS notes that "a quarter of the November rise in prices for final demand goods is attributable to a 54.6-percent jump in the index for chicken eggs" (note that food prices were an upside surprise in November CPI as well, though).
- And as suggested by the core index, another upside driver to headline PPI was that "margins for final demand trade services moved up 0.8 percent" - this is an imputed inflation reading.
- Core (ex-food/energy/trade services) continues to cool, with the 2.1% 3-month annualized pace the lowest reading of the year, and down from 2.7% in October.
- The 6-month annualized figure is pulling back as well, after a secondary peak of 4.4% in May 2024 it's now down to 2.6% and continuing to head in the right direction (and well below 6-8% readings during the pandemic supply chain disruptions).
- The Fed will also find comfort in the details of the release which appear to show softening in various PCE-relevant categories, more on which separately.
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