U.S. Producer Prices Rise 0.2% In December, Slightly Less Than Expected

(RTTNews) - Producer prices in the U.S. rose by slightly less than expected in the month of December, according to a report released by the Labor Department on Tuesday.

The Labor Department said its producer price index for final demand crept up by 0.2 percent in December after climbing by 0.4 percent in November. Economists had expected producer prices to rise by 0.3 percent.

Meanwhile, the report said the annual rate of producer price growth accelerated to 3.3 percent in December from 3.0 percent in November. The acceleration matched economist estimates.

The monthly uptick by producer prices was largely due to a sharp increase by energy prices, which spiked by 3.5 percent in December after coming in unchanged in November.

Prices for meats, motor vehicles and fresh fruits and melons also rose, while pries for fresh and dry vegetables and carbon steel scrap declined.

The report also said prices for services came in unchanged in December, as a surge by prices for transportation and warehousing services was offset by decreases by prices for trade and other services.

Core producer prices, which exclude prices for food, energy and trade services, inched up by 0.1 percent in December, matching the uptick seen in November.

The annual rate of growth by core producer prices slowed to 3.3 percent in December from 3.5 percent in the previous month.

"Aside from a jump in energy costs, input costs were much cooler in December," said Nationwide Senior Economist Ben Ayers. "This tempers the higher end of expectations for tomorrow's CPI report and clears the way for softer inflation readings in early 2025."

He added, "Still, tariff uncertainty hangs over costs for producers with many recent survey respondents expressing concerns that costs will climb this year, raising the risk of unexpected inflationary pressures for consumers."

On Wednesday, the Labor Department is scheduled to release its more closely watched report on consumer price inflation in the month of December.

Economists currently expect consumer prices to rise by 0.3 percent in December, matching the increase seen in November. The annual rate of growth is expected to accelerate to 2.9 percent from 2.7 percent.