Around the end of 2018, the annual rate of prices received by producers began a downtrend which then continued through 2019. Months in which prices picked up suggested the trend may have been coming to an end but, so far, the down trend has continued.
The figures from December have been published by the Bureau of Labor Statistics and they indicate producer prices increased by just 0.1% after seasonal adjustments, less than the 0.2% which had been expected but an increase from November’s flat result. On a 12-month basis, the rate of producer price inflation after seasonal adjustments accelerated to 1.3% after recording 1.1% in November and 1.0% in September.
ANZ economist Hayden Dimes said the result was weaker than expected “due to softness in the service sector offsetting higher-priced goods.” However, he also noted some Federal Reserve officials were waiting for the effects of last year’s rate cuts to flow through. “Inflation remains well below the Fed target of 2% but San Francisco Federal Reserve President Daly said the three rate cuts last year put the economy on track to reach that target.”
