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US producer prices increase moderately in December

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WASHINGTON – Producer price inflation in the United States slowed in December as the cost of goods fell as stretched supply chains began to loosen, encouraging signs that inflation has likely hit a low. peak.

The producer price index for final demand rose 0.2% last month after jumping 1.0% in November. Wholesale prices for services increased 0.5%, which explains the increase in PPI. This follows a 0.9% jump in November.

Merchandise prices fell 0.4% after advancing 1.1% the previous month. They were held back by falling wholesale prices for food and energy. Excluding food and energy, prices for goods rose 0.5% after increasing 0.8% in November.

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In the 12 months to December, the PPI rose 9.7% after accelerating 9.8% in November.

The government revised the PPI data from August to November last due to late data submission as well as to take into account corrections made by respondents.

Economists polled by Reuters predicted the PPI would gain 0.4% on a monthly basis and rise 9.8% year-on-year.

The Fed has an inflation target of 2%. Inflation is rising as COVID-19 and the recovery from the pandemic have caused bottlenecks in the supply chain. Consumer prices jumped 7% year-on-year in December, the biggest increase since June 1982, the government said on Wednesday.

But there is cautious optimism that price pressures are about to peak. A survey by the Institute for Supply Management last week showed that manufacturers were reporting improved deliveries from suppliers in December.

Excluding the volatile components of food, energy and commercial services, producer prices rose 0.4% in December. The so-called core PPI climbed 0.8% in November. In the 12 months to December, the core PPI rose 6.9%, matching the increase in November. (Report by Lucia Mutikani Editing by Chizu Nomiyama)