WASHINGTON (Reuters) – U.S. producer prices unexpectedly fell in December amid a decline in the cost of goods, while prices for services were unchanged, which bodes well for lower inflation in the months ahead.
The producer price index for final demand dipped 0.1% last month, the Labor Department’s Bureau of Labor Statistics said on Friday. Data for November was revised to show the PPI falling 0.1% instead of being unchanged as previously reported.
Economists polled by Reuters had forecast the PPI rebounding 0.1%. In the 12 months through December, the PPI increased 1.0% after advancing 0.8% in November.
Data on Thursday showed consumer prices increased more than expected in December, driven by solid gains in shelter and healthcare costs. Financial markets remain hopeful that the Federal Reserve will start cutting interest rates in March.
The U.S. central bank has hiked its policy rate by 525 basis points to the current 5.25%-5.50% range since March 2022.
The narrower measure of PPI, which strips out food, energy and trade services components, rose 0.2% in December after gaining 0.1% in the prior month. The so-called core PPI rose 2.5% on a year-on-year basis after increasing 2.4% in November.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)
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