BLS: U.S. wholesale prices rose 0.5% in December

Jan. 30 (UPI) — The Bureau of Labor Statistics on Friday said the Producer Price Index rose by a half percent in December, which raises concern that inflation could rise as a result.

The index measures the cost businesses pay for wholesale goods and is among the factors that potentially affect inflation and unemployment rates.

The nation’s inflation rate currently is 2.7%, while unemployment was 4.4% in December.

“On an over-year-ago basis, core final demand PPI goods rose 3.7%, which points to ongoing pipeline pressures for consumer inflation that appears to be bolstered in part by tariffs,” JPMorgan analysts said in a statement.

National Economic Council Director Kevin Hassett told CNBC that the higher Producer Price Index is not matched by the Consumer Price Index, which decreased in December.

“The CPI over the last three months, the annual rate, was lower than 2,” Hassett said.

“I think that right now we’re seeing materials prices like gold and so on are up quite a bit, in part because of all the investment that’s happening for artificial intelligence and data centers and so on,” he added.

December’s half-percent rise in the Producer Price Index was more than double its 0.2% rise in November and 0.1% increase in October, the BLS said.

For the year, wholesale prices, not including foods, energy and trade services, rose by 3.5%, which is slightly less than the 3.6% increase in 2024.

“Over 40 percent of the December increase in prices for final demand services can be traced to a 4.5-percent rise in margins for machinery and equipment wholesaling,” the BLS reported.

The cost of nonferrous metals also rose by 4.5% in December.

Also posting cost increases were the “indexes for guestroom rental; food and alcohol retailing; health, beauty and optical goods retailing; portfolio management; and airline passenger services also advanced,” the bureau said.

“Prices for residential natural gas, motor vehicles, soft drinks and aircraft and aircraft equipment also increased.”

While such costs rose, others declined by significant margins, including the cost for bundled wired telecommunications access services, which declined by 4.4%.