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Producer prices increase 0.3% in November

Anthony Larkin, meat manager of the Richmond Heights Schnucks Market, places boxes of stuffing near the turkey freezer section in Richmond Heights, Missouri on November 15, The Labor Department said producer prices rose 0.3% in November. Photo by Bill Greenblatt/UPI
Anthony Larkin, meat manager of the Richmond Heights Schnucks Market, places boxes of stuffing near the turkey freezer section in Richmond Heights, Missouri on November 15, The Labor Department said producer prices rose 0.3% in November. Photo by Bill Greenblatt/UPI | License Photo

Dec. 9 (UPI) -- The producer price index, which measures what companies receive for their products, increased by a seasonally adjusted 0.3% last month and 7.4% from this time in 2021, jumps that continue to be sparked by food increases, according to a new report from the Labor Department on Friday.

It marked the third consecutive month the index increased by 0.3% after being flat in August and increasing by 0.4% in July.

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The report, which comes ahead of the consumer price index scheduled for Tuesday, said the food index increased by 3.3% in November, catapulted by a 38% rise in wholesale vegetable prices.

Excluding the more volatile food and energy index, the core PPI increased 0.4% in November and 6.2% from 2021, compared to a 6.6% increase in October.

The index for final demand services increased 0.4% in November after moving up 0.1% in October.

"About one-third of the November rise in the index for final demand services can be traced to prices for securities brokerage, dealing, investment advice, and related services, which jumped 11.3%," the report said.

"The indexes for machinery and vehicle wholesaling, loan services, fuels and lubricants retailing, portfolio management, and long-distance motor carrying also moved higher."

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The index for final demand goods rose 0.1% last month following a 0.6% rise in October.

"The November advance in prices for final demand goods was led by a 38.1% jump in the index for fresh and dry vegetables," the report said. "Prices for chicken eggs; meats; canned, cooked, smoked, or prepared poultry; and tobacco products also moved higher.

"Conversely, the gasoline index fell 6%. Prices for diesel fuel, residential natural gas, and primary basic organic chemicals also declined."

The rising number and inflation will likely encourage the Federal Reserve to keep increasing interest rates by its next meeting. An expected 0.5 percentage point hike would in increase the benchmark borrowing rates to a range of 4.25%-4.5%.

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