Washington, Jan. 15 (BNA): The United States Department for Work and Pensions reported on Tuesday that its producer price index, which tracks inflation before it reaches consumers, rose by 0.2% last month compared to November, down from a 0.4% increase the month before, Compared to the previous year, producer prices increased by 3.3%, marking the biggest rise since February 2023, up from a 3% gain in November.

A 3.5% rise in energy prices from November to December driven by a 9.7% increase in petrol prices pushed the overall index higher Food prices fell by 0.1% in December.

Still, the overall increases were slightly lower than economists had predicted. U.S. markets surged immediately after the release of the new inflation data, according to the Associated Press (AP).

Excluding food and energy prices, so-called core wholesale inflation remained unchanged from November but rose by 3.5% compared to the previous year. The producer price report was released a day before the Department for Work and Pensions is set to report on consumer prices. Its consumer price index is expected to rise by 0.3% from November and 2.8% from December 2023, according to a survey of forecasters conducted by the data firm FactSet.

Inflation has decreased from the four-decade highs it reached in mid-2022, giving the Federal Reserve enough confidence to reverse course and cut rates three times in 2024. However, progress on inflation has stalled in recent months, and yearly increases in consumer prices remain above the central bank’s 2% target.

As a result, Federal Reserve officials signalled in December 2024 that they planned to be more cautious about cutting rates this year. They now forecast just two rate reductions in 2025, down from the four they predicted in September. They are widely expected to leave rates unchanged at their next meeting on January 28-29.

A.k.s, H.K, Z.H, s.a