US producer prices rise moderately in December
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U.S. producer prices increased moderately in December, but that is unlikely to change views that the Federal Reserve would not cut interest rates again before the second half of this year amid labor market resilience.
The producer price index for final demand rose 0.2% last month after an unrevised 0.4% advance in November, the Labor Department's Bureau of Labor Statistics said on Tuesday. Economists polled by Reuters had forecast the PPI climbing 0.3%.
In the 12 months through December, the PPI accelerated 3.3% after increasing 3.0% in November. The surge in the year-on-year rate reflected last year's lower prices, especially for energy products, dropping out of the calculation.
FED MINUTES SHOW POLICYMAKERS SEE IMMIGRATION, TARIFF SHIFTS CREATING INFLATION UNCERTAINTY
A customer shops at a grocery store in Chicago, Illinois. (Scott Olson/Getty Images / Getty Images)
The report followed news last week of a sharp rise in nonfarm payrolls in December and decline in the unemployment rate, which led economists to expect that the U.S. central bank would keep rates unchanged through June.
US ECONOMY ADDED 256K JOBS IN DECEMBER, WELL ABOVE EXPECTATIONS
Workers build homes in Lillington, North Carolina, on June 15, 2023. (Photographer: Allison Joyce/Bloomberg via Getty Images / Getty Images)
At least one Wall Street institution, Bank of America Securities, now believes the Fed's easing cycle is over. Goldman Sachs now expects two cuts this year in June and December, revised down from three previously.
The central bank kicked off its easing cycle in September and has lowered its benchmark overnight interest rate by 100 basis
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