WASHINGTON (AP) — Prices at the wholesale level rose 0.4 percent in November and 3.1 percent over the past year. It was the biggest annual jump in nearly six years and reflected a big spike in the price of gasoline and other energy products.
Last month's increase in the producer price index, which measures inflation pressures before they reach the consumer, marked the third straight month that wholesale prices have risen by 0.4 percent, the Labor Department reported Tuesday. The 3.1 percent rise from November 2016 was the biggest 12-month gain since a matching 3.1 percent increase for the 12 months ending in January 2012.
Core inflation, which excludes volatile energy and food prices, rose 0.3 percent in November and 2.4 percent for the past 12 months, a more benign reading on inflation.
The November increase reflected a 4.6 percent increase in energy costs, the biggest since May 15. That increase was paced by a 15.8 percent surge in gasoline costs, the sharpest one-month gain in gasoline prices since an 18.6 percent jump in August 2009.
Food costs rose a modest 0.3 percent after a bigger 0.5 percent gain in October.
The government will report on consumer prices Wednesday and economists are looking for a 0.4 percent November increase due to rising energy prices at the retail and wholesale levels.
The Federal Reserve seeks to manage interest rates to keep inflation rising at a moderate 2 percent but over the past six years, it has failed to reach that goal.
However, the central bank is expected to boost a key interest rate for a third time this year at its meeting this week. Fed officials believe that, while inflation had been falling farther from its 2 percent goal in 2017, that situation is about change, as a tighter labor market fuels inflation. Unemployment in November was 4.1 percent, the lowest level in nearly 17 years.