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U.S. Producer Prices Inch Up Less Than Expected In December

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A report released by the Labor Department on Wednesday showed a modest increase in U.S. producer prices in the month of December.

The Labor Department said its producer price index for final demand inched up by 0.1 percent in December after coming in unchanged in November. Economists had expected prices to rise by 0.2 percent.

The uptick in producer prices was partly due to a jump in energy prices, which surged up by 1.5 percent in December after climbing by 0.6 percent in November.

Meanwhile, the report said food prices edged down by 0.2 percent in December after spiking by 1.1 percent in November and by 1.3 percent in October.

Excluding food and energy prices, core producer prices still crept up by 0.1 percent in December after dipping by 0.2 percent in November. Core prices were also expected to increase by 0.2 percent.

The index for final demand services was unchanged, as a 2.7 percent jump in prices for transportation and warehousing services offset a 0.3 percent drop in prices for trade services and a 0.1 percent dip in prices for other services.

Producer prices in December were up by 1.3 percent compared to the same month a year ago, reflecting an acceleration from the 1.1 percent year-over-year growth in November.

Meanwhile, the annual rate of growth in core consumer prices slowed to 1.1 percent in December from 1.3 percent in November.

"Overall, there is still little sign of any significant rise in price pressures at the start of the inflation pipeline, underlining our view that the Fed will keep interest rates on hold for the foreseeable future," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

A separate report released by the Labor Department on Tuesday showed consumer prices in the U.S. also increased by slightly less than anticipated in the month of December.

The Labor Department said its consumer price index rose by 0.2 percent in December after climbing by 0.3 percent in November. Economists had been expecting another 0.3 percent increase.

Excluding food and energy prices, core consumer prices inched up by 0.1 percent in December after rising by 0.2 percent in November. Core prices had been expected to rise by another 0.2 percent.

The report also said the annual rate of consumer price growth accelerated to 2.3 percent in December from 2.1 percent in November, reaching the fastest rate of growth since October of 2018.

The annual rate of growth in core consumer prices was 2.3 percent in December, unchanged from the two previous months.

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