• Food & energy prices are firm again.

• Core goods prices rise moderately.

• Service prices hold steady.

The Producer Price Index for final demand rose 0.1% (0.8% y/y) during November following a 0.3% October gain. It was the smallest of seven straight m/m gains and matched expectations in the Action Economics Forecast Survey. Underlying pricing power remained weak. Producer prices excluding food & energy edged 0.1% higher (1.4% y/y), the same as they did in October. A 0.2% increase had been expected. Another measure of underlying pricing power is the PPI excluding food, beverages and trade services. It also improved 0.1% in last month (0.9% y/y) following a 0.2% October gain. It also was the weakest increase in a half-year.

Energy prices strengthened 1.2% (-11.2% y/y) as natural gas prices increased 2.7% (5.0% y/y) and electric power costs rose 0.6% (0.7% y/y). A 1.9% decline (-29.9% y/y) in gasoline prices offset these increases as did a 0.6% easing (-44.4% y/y) in home heating oil prices. A 0.5% increase (1.2% y/y) in food prices accompanied these changes last month. Beef & veal prices rose 2.2% (-8.1% y/y) while egg prices declined 2.8% (NSA, -15.1% y/y). Dairy product prices strengthened 3.0% (1.2% y/y).

Final demand goods prices less food & energy improved 0.2% last month (1.3% y/y) following October's stability. Prices for finished consumer goods less food & energy improved 0.1% last month (1.3% y/y) after holding steady in October. Core nondurable goods prices rose 0.2% (1.6% y/y) for a second straight month. Durable consumer product prices edged 0.1% higher (0.9% y/y) following a 0.3% decline. Private capital equipment prices rose 0.2% last month and reversed the prior month's decline. The y/y change of 1.1% compares to a high of 2.9% in January of 2019. Government purchased goods prices rose 0.1% (1.0% y/y) after improving 0.2%.

Services prices for final demand were unchanged in November (1.5% y/y), down from a 0.5% August rise. Trade services prices fell 0.3% (+3.1% y/y) following two months of 0.2% increase. The cost of trade of finished goods also fell 0.3% (+3.1% y/y) after rising 0.2%. Transportation & warehousing services prices declined 0.9% (-4.6% y/y) after surging 1.1%. Excluding these costs, trade services prices improved 0.2% (1.3% y/y) after a 0.1% rise.

The cost of construction edged 0.1% higher (1.2% y/y) following stability in October.

Intermediate product prices strengthened 1.4% (-0.3% y/y) following a 0.3% rise as processed fuel prices jumped 6.0% (-5.1% y/y).

The PPI data can be found in Haver's USECON database. Further detail can be found in PPI and PPIR. The expectations figures are available in the AS1REPNA database.