U.S. producer prices rose in November, with gasoline prices surging and the cost of other goods increased, leading to the largest annual gain in nearly six years and pointing to a broad acceleration in wholesale inflation.
The U.S. Labor Department on Tuesday said its producer price index for final demand increased 0.4% last month. The PPI has now increased by the same amount for three straight months.
In the 12 months through November, the PPI shot up 3.1%. That was the biggest gain since January 2012 and followed a 2.8% rise in October. Economists had forecast the PPI rising 0.3% last month and increasing 2.9% from a year ago.
The strong rise in the PPI supports views that weak inflation readings experienced through the first half of the year have probably run their course. The PPI report was released as Federal Reserve officials prepared to gather for a two-day policy meeting.
The U.S. central bank is expected to raise interest rates on Wednesday, for a third time this year, with a robust labour market and strengthening economy expected to overshadow policymakers' earlier concerns about tame inflation.
