The U.S. Bureau of Labor Statistics released data on Tuesday regarding the Producer Price Index (PPI) for December, which came in lower than market expectations. According to the data, the U.S. Producer Price Index recorded a year-on-year increase of 3.3% in December, which was below expectations that predicted growth of around 3.4%. Meanwhile, the previous month, November, had reported a growth of 3.0%.
On a monthly basis, the U.S. Producer Price Index recorded a growth of 0.2% in December, which was also lower than expectations that forecasted a growth of 0.3%, following a growth of 0.4% in the previous month of November.
Additionally, the core Producer Price Index, which excludes food and energy prices, grew by 3.5% year-on-year in December, which was again lower than market expectations anticipating a growth of around 3.8%. The reading for November showed a growth of 3.4%.
On a monthly basis, the change in the core Producer Price Index was 0.0% during December, which was below market expectations that had predicted a growth of 0.3%, after the index witnessed a growth of 0.2% in the previous month of November.
It is worth noting that The Producer Price Index measures the change in the prices of goods and services in their final form as supplied by producers, excluding food, energy, and trade. It consists of several indicators measuring the average change in prices for goods and services.
The importance of this index has increased recently, and it has a strong influence on the movements of the U.S. dollar against other currencies, as it may serve as an early indicator of U.S. inflation, which affects the Federal Reserve's decisions regarding interest rates.
