U.S. producer prices tepid; jobless claims at more than two-year high
WASHINGTON - U.S. producer prices were unexpectedly unchanged in November as increases in food and gasoline prices were offset by declining costs for services, pointing to muted inflation despite a recent uptick in consumer prices.
The reports were released a day after the Federal Reserve’s decision to keep interest rates steady. The U.S. central bank indicated on Wednesday that borrowing costs were likely to remain unchanged at least through next year amid expectations the economy would continue to grow modestly and the unemployment rate remain low.
Excluding the volatile food, energy and trade services components, producer prices were also unchanged last month after edging up 0.1% in October. The so-called core PPI increased 1.3% in the 12 months through November, the smallest gain since September 2016, after advancing 1.5% in October. The core PCE price index rose 1.6% on a year-on-year basis in October and has fallen short of its target this year. November PCE price data will be published next week.In another report on Thursday, the Labor Department said initial claims for state unemployment benefits surged 49,000 to a seasonally adjusted 252,000 for the week ended Dec. 7, the highest reading since September 2017. The increase was the largest since August 2017.
The underlying trend in claims remains consistent with a strong labor market. The government reported last Friday that the economy added a robust 266,000 jobs in November and the unemployment rate fell back to 3.5%, its lowest level in nearly half a century. Other data on housing, trade and manufacturing have also been relatively upbeat and suggested the economy was growing at a moderate speed rather than stalling.
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