Why Did Wholesale Inflation Rise In November? Blame Eggs | Global News Avenue

Wholesale prices rose faster than economists expected in November, with wholesale inflation recording the biggest annual gain since February 2023 – thanks in part to eggs.

this Producer Price Index (PPI) Wholesale prices for goods and services rose 0.4% in November from the previous month, pushing annual inflation up 3%, according to the Bureau of Labor Statistics. This latest data comes after wholesale prices rose October.

Rising food prices push up inflation in November

Egg prices rose by more than 54%, driving overall commodity prices to rise by 0.7% month-on-month.

Egg Prices soar In recent months, in part because of the avian flu virus that has hit the U.S. national commercial poultry flock. Inflation at the wholesale level may affect consumer prices. Prices also increased for fresh and dried vegetables, fresh fruits and melons, and processed poultry, the Bureau of Labor Statistics said.

Some economists said that putting aside the impact of higher food prices, the wholesale inflation report showed that prices were basically under control. Surge in producer prices not expected to deter Fed lower interest rates next week.

“Once you look beyond the headlines, PPI is less scary. While the underlying data calmed fears of a new inflation spike, they also did not suggest inflation would quickly fall to 2%.” National Financial Market Economics Home Oren Klachkin writes. “Producer prices, and the broader inflation complex, are on a long and bumpy journey toward the Fed’s goals.”

Producer prices higher than expected, but rate cut still far away

Economists expect wholesale inflation to slow, with Wells Fargo’s November Producer Price Index (PPI) report projecting annual inflation at 2.7%. The report follows yesterday’s release of the Consumer Price Index (CPI) for November, which showed Inflation rises This is in line with economists’ predictions.

If you don’t include volatile food and energy costs, monthly”nuclearThe PPI reading edged up 0.2%. Wholesale services inflation also rose at a monthly rate of 0.2%, prompting some economists to believe that the overall increase in PPI is temporary.

“Commodity prices were the driver of the unexpected rise, with food prices unlikely to continue rising, pushing the overall index higher. However, it was encouraging that core producer prices recorded their smallest monthly rise since May 2023,” Oxford said Matthew Martin, senior economist at the Institute for Economic Research.

With the Federal Reserve set to meet next week, market watchers are closely scrutinizing pricing data after officials said Inflation may affect their decisions About whether Cut interest rates again.

Despite the rise in November, economists do not believe the inflation data will affect an expected rate cut at the December meeting.

“Despite the unexpected rise in overall producer prices, details in the November report support another 25 basis point rate cut by the Fed this month,” Martin wrote.