US final demand inflation edges past forecasts in November

Wholesale inflation in the States picked up a bit more quickly than anticipated last month.

According to the Department of Labor, in seasonally-adjusted terms, so-called final demand prices in the US rose at a year-on-year pace of 0.8% in November.

That compared to a 0.5% pace in the month before and economists' projections for an increase of 0.6%.

Higher prices for goods accounted for all of the acceleration in inflation, rising by 0.4% month-on-month, as those of food rose 0.5% alongside a 1.5% jump in energy costs.

Services prices meanwhile were flat versus October.

Core prices meanwhile, which exclude food, energy and trade, rose at a year-on-year clip of 0.9%, against a 0.8% increase in the month before.

Ian Shepherdson at Pantheon Macroeconomics saw signs in the data that pipeline inflation was building, pointing out how trade services prices, which reflect retail and wholesale margins had jumped by 3.1% year-on-year - the most since September 2019.

"Retail margins have jumped sharply across an array of sectors which have seen demand soar during the pandemic, including RVs, autos, hardware/building materials and appliances," he said.

"If this offers a glimpse of what will happen to margins in consumer services when demand rebounds after the pandemic, it means that core CPI and PCE inflation will rise sharply from late next spring."