November Economic Data Overview
Economic data released on Wednesday indicated a smaller-than-anticipated increase in wholesale prices and continued robust consumer purchasing activity during November.
Producer Price Index (PPI)
The producer price index, which measures the prices producers receive for final demand goods, increased by 0.2% for the month, according to seasonally adjusted figures from the Bureau of Labor Statistics. This figure was below the Dow Jones consensus forecast of a 0.3% gain, though it represented a slight rise from October's data.
Excluding volatile food and energy components, the core PPI remained flat for the month, contrary to expectations for a 0.2% increase. Despite the soft monthly readings, the headline PPI registered a 3% increase from the previous year, exceeding the Federal Reserve's 2% target. Core PPI, excluding trade services, showed a 3.5% annual increase, marking the largest 12-month move since March 2025, as reported by the BLS.
A 0.9% rise in goods prices contributed significantly to the overall PPI increase, with over 80% attributed to a 4.6% jump in energy prices. Services prices experienced no change.
Retail Sales
On the consumer front, retail sales increased by 0.6% in November, based on Commerce Department figures adjusted for seasonality but not inflation. Economists surveyed by Dow Jones had projected a 0.4% increase. Excluding automobile sales, retail figures rose by 0.5%, surpassing the 0.3% estimate.
November's retail gains were broad-based across various sectors. Motor vehicle and parts dealers, building material and garden centers, gas stations, sporting goods stores, and miscellaneous outlets all reported gains exceeding 1%. Year-over-year, sales advanced by 3.3%, surpassing the 2.7% increase in the consumer price index for the same month.
Data Reporting and Market Reaction
The Bureau of Labor Statistics continues to operate behind schedule in releasing PPI data due to a government shutdown from the previous year, and retail sales data also reflects a lag. Financial markets showed minimal reaction to the data, with stock futures indicating a downward trend and Treasury yields remaining largely stable. Market sentiment indicated minimal probability of a Federal Reserve rate adjustment during its upcoming meeting this month.