MW Wholesale prices posts smaller-than expected increase in a good sign on inflation
By Jeffry Bartash
Producer price index rises just half as much as forecast
The numbers: Wholesale prices in the U.S. rose modestly in December in a reprieve from a string of elevated inflation in the final months of 2024 that have likely put off any further reductions soon in interest rates.
Investors will wait for further confirmation in the consumer price index due Thursday.
The producer price index, where the seeds of inflation are planted, rose a mild 02% last month, the government said Tuesday. Wall Street had predicted an increase double that size.,
The rate of increase in wholesale inflation in the past 12 months rose to 3.3% from 3.0%, however.
The core rate of wholesale inflation, which omits volatile food, energy and trade margins, increased an even smaller 0.1% last month.
The 12-month core rate moved down to 3.3%% from 3.5%, but it's still too high for the Federal Reserve. The core rate is seen by the Fed as a better predictor of future trends.
Big picture: A pronounced slowdown in inflation over the past two years appears to have come to a halt, at least temporarily, despite a more positive PPI report.
The result: Fed rate cuts are on hold, a bull market in stocks has suffered a blow and the outlook for the economy is more uncertain.
Market reaction: The Dow Jones Industrial Average and S&P 500 were set to open slightly higher in Tuesday trading.
-Jeffry Bartash
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(END) Dow Jones Newswires
January 14, 2025 08:38 ET (13:38 GMT)
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