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4d ago

U.S. Producer Prices Jump 0.5% in December, Keeping Inflation Pressures Elevated

A services-led rise tied to fatter trade margins, with possible tariff pass-through, complicates prospects for near-term rate cuts.

A person shops for vegetables at a supermarket in Manhattan, New York City, U.S., March 28, 2022. REUTERS/Andrew Kelly
A ship is docked Thursday, Jan. 15, 2026, at PortMiami in Miami. (AP Photo/Lynne Sladky)
A shopper at a grocery store in Brooklyn, N.Y., on Dec. 12, 2025.

Overview

  • The Producer Price Index rose 0.5% from November and 3.0% from a year earlier, topping monthly forecasts and marking the hottest wholesale reading in three months.
  • Core PPI, excluding food and energy, climbed 0.7% on the month and about 3.3% year over year, pointing to persistent underlying price pressures.
  • Services costs increased 0.7%, led by a 1.7% jump in trade margins that accounted for roughly two-thirds of the services gain, while prices for goods were unchanged.
  • Analysts and the Federal Reserve cited partial pass-through from import tariffs as a factor, though effects remain uneven across sectors.
  • Financial markets reacted with a hawkish tilt—Treasury yields and the dollar rose as stocks and precious metals slipped—after the Fed held rates steady earlier this week.