US PPI data rose slightly in November, mainly because gasoline and other energy prices went up. At the same time, many businesses appear to be absorbing higher costs from import tariffs instead of passing them on to customers.
The Producer Price Index, or PPI, which measures prices that producers receive for goods and services, rose 0.2% in November. This followed a 0.1% rise in October. Over the past 12 months through November, producer prices rose 3.0%, up from 2.8% in October.
Energy prices were the main driver
Goods prices at the producer level jumped 0.9% in November, the biggest increase since February 2024. This came after a 0.4% decline in October. More than 80% of the increase in goods prices was caused by a sharp 4.6% rise in energy prices, including gasoline.
Food prices were unchanged after falling in October. When food and energy are excluded, producer goods prices rose 0.2%, slowing from a 0.4% increase in October.
Why was the data delayed?
The data was released late because of a 43-day federal government shutdown, the longest on record. While the shutdown stopped the government from collecting enough information to release the Consumer Price Index for October, officials were still able to collect PPI data, though with delays.
Because of the shutdown, inflation data has been uneven and harder to interpret. The government reported on Tuesday that consumer prices rose 0.3% in December, which was influenced due to higher food and rent costs. Consumer prices were up 2.7% from a year earlier.
Services prices stayed flat
Wholesale services prices did not change in November after rising 0.3% in October. Trade service margins fell 0.8%, showing that many businesses are taking on higher costs themselves. This indicates that companies are absorbing some of the impact of President Donald Trump’s sweeping import tariffs, helping prevent a larger rise in inflation.
Prices rose sharply in some service areas. Bundled wired telecommunications access services jumped 4.6%. Costs also increased for machinery and vehicle wholesaling, portfolio management, and outpatient care.
The Bureau of Labor Statistics said it did not release a separate PPI report for October because the shutdown affected normal operations. However, the agency later confirmed it was able to include fuller October data with delays.
October’s producer prices rose 0.1% from September and were up 2.8% from a year earlier, helped by falling energy prices. Data for September was also revised higher. The annual PPI rate for that month was raised to 3.0% from 2.7%.
How inflation looks without food and energy
Core PPI, which excludes food and energy, was flat in November. This was below expectations for a 0.2% increase. However, on a yearly basis, headline PPI remains elevated at 3.0%, well above the Federal Reserve’s 2% inflation target. Core PPI excluding trade services rose 3.5% over the past year, the largest annual increase since March 2025.
What is happening on the consumer side
Retail sales rose strongly in November, showing that consumers are still spending.Sales increased 0.6% from October, beating expectations for a 0.4% rise. When auto sales are excluded, retail sales rose 0.5%, also stronger than forecast.
Sales gains were seen across many sectors, including auto dealers, building materials, garden centers, gas stations, sporting goods stores, and other retailers. Compared with a year earlier, retail sales were up 3.3%, higher than the 2.7% annual increase in consumer prices.
What this means for interest rates
The Federal Reserve is expected to keep its key interest rate unchanged in the 3.50% to 3.75% range at its January 27–28 meeting. Tensions between Fed Chair Jerome Powell and President Donald Trump have increased uncertainty around future rate cuts. Most economists do not expect a rate cut before Powell’s term ends in May. The Trump administration has opened a criminal investigation into Powell, which the Fed chief described as a “pretext” to influence interest rate decisions.