Producer prices higher than expected
U.S. producer prices rose more than expected in November, lifted by a surge in energy costs, and recorded the first year-on-year gain since last November, according to a government report on Tuesday.
The Labor Department said the seasonally adjusted index for prices paid at the farm and factory gate jumped 1.8 percent, the largest gain in three months, following a 0.3 percent rise in October.
Analysts polled by Reuters had expected producer prices to increase by 0.8 percent last month. Compared with the same period last year, producer prices surged 2.4 percent in November, posting their first gain in a year and the largest rise since October 2008.
Markets had expected producer prices to increase 1.6 percent versus a year ago.
The data came as the Federal Reserve prepared to start a regular two-day meeting to deliberate on monetary policy.
The U.S. central bank is expected to leave interest rates steady near zero, but analysts will been keen to see if it maintains its pledge to keep borrowing costs ultra low for an extended period. This comes as recent economic reports have pointed to a recovery that is becoming entrenched.
The Labor Department said gasoline prices rose 14.2 percent month, eclipsing a sharp moderation in food price increases.
Core producer prices, which exclude food and energy costs, rose a larger-than-expected 0.5 percent last month after surprising markets with a 0.6 percent fall in October. The core index had been forecast to rise 0.2 percent in November. Core prices last month were lifted by a rebound in prices for light motor trucks.
The core producer price index rose 1.2 percent measured on a year-on-year basis, versus a forecast for a 0.9 percent gain. The core index, excluding cars and light trucks, rose 0.2 percent from October. Light motor truck prices, which had depressed core producer prices in October, rose 4.2 percent last month, the largest gain since November 2006
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
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