Energy prices drive US wholesale inflation to 5-year record high
Washington (AFP) –
Soaring gasoline prices drove US wholesale inflation higher in November, with one measure hitting its second straight five-year record high, according to government data released Tuesday.
However, other signs of price pressures were muted, with less volatile categories holding steady or slowing.
The Federal Reserve, which begins a two-day policy meeting on Tuesday, is widely expected to raise benchmark interest rates this week despite internal disagreements about the threat of inflation.
The Producer Price Index, which tracks changes in the costs of wholesale goods and services, rose 0.4 percent in November, which matched analyst expectations and was the same as in September and October.
But excluding the more volatile food and fuel categories, PPI rose 0.3 percent, the same increase recorded in the prior two months.
On a 12-month basis, the index gained 3.1 percent, its highest level January 2012, surpassing the five-year record set in October.
Analysts say there is generally weak correlation between PPI and other more closely watched measures for consumer inflation, but it is watched as a sign of price pressures in the pipeline.
Last month's PPI gain rise was driven largely by record wholesale costs for gasoline, which surged 15.8 percent, the largest one-month gain since August 2009.
Price gains for services, however, slowed from the previous month, with margins for machinery and equipment falling as much as 1.9 percent.
Fed policymakers have been confessed to being baffled throughout much of 2017 by persistently weak inflation, especially in the face of falling unemployment, but even so are expected to raise rates at this week's meeting to keep ahead of expected price gains in 2018.
© 2017 AFP