The producer price index (PPI) retreated by a seasonally adjusted .8% in November. The index gauges how much manufacturers and wholesalers pay for finished goods and is a primary measure for inflation.
The most volatile components of the index are energy prices and food prices. Energy prices fell 4.6% with prices for gasoline dropping 10.1%. Food prices rose 1.3%.
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Those components are taken out to see what is called core PPI. This is a more accurate measure of the real inflation picture since the most volatile components are excluded.
Core PPI showed that prices advanced only .1% last month. A survey of economists by Dow Jones Newswire had predicted the overall PPI to fall .5% and core prices to rise .1%.
Wholesale prices of passenger cars rose .5% in November. Year-over-year, the PPI rose 1.5%, well below the Fed’s inflation target of a 2% annual rate.
The Fed noted in the concluding statement
to its meeting on December 11 and 12 that the inflationary outlook looks stable and continues to run below its target.