U.S. Producer Prices Rise 3.3% in December, Inflation Pressures Persist

Moderate wholesale price increases and strong job growth signal the Federal Reserve may delay further interest rate cuts.

The Producer Price Index (PPI) rose 0.2% in December, bringing the annual wholesale inflation rate to 3.3%, up from 3.0% in November.
Higher energy costs, including a 9.7% surge in gasoline prices, were key drivers of December's PPI increase, while food prices dipped slightly.
Core PPI, which excludes volatile food and energy prices, remained flat month-to-month but increased 3.5% year-over-year.
A stronger-than-expected December jobs report, with 256,000 jobs added and unemployment falling to 4.1%, has led some analysts to predict the Federal Reserve will hold off on further rate cuts in early 2025.
The Federal Reserve is expected to keep rates steady at its January meeting, with analysts divided on whether additional rate cuts or hikes could occur later in the year depending on inflation trends.