Wholesale Wholesale inflation in the United States remained elevated in November, signaling that inflationary pressures may not have peaked yet and could eventually impact consumers more directly. According to the latest Producer Price Index (PPI) data released by the Bureau of Labor Statistics, prices paid to producers rose 0.2% month over month, pushing the annual rate to 3%.
A key driver behind this increase was rising energy costs, which reversed some of the cooling seen earlier in the fall. In October, falling energy prices had helped keep wholesale inflation softer, but that relief proved temporary. Revised data also showed that September’s inflation was hotter than previously estimated, reinforcing concerns that price pressures are more persistent.
Another major factor weighing on wholesale prices is the impact of President Donald Trump’s sweeping tariffs on imported goods. The report suggests that many wholesalers and retailers are still absorbing a significant portion of these higher costs instead of fully passing them on to consumers. Trade services margins fell for the second consecutive month, indicating businesses are sacrificing profits to protect customers from sharper price hikes.
However, underlying inflation trends are more troubling. When excluding volatile categories such as food, energy, and trade services, wholesale prices rose sharply, with the annual rate climbing to 3.5% in November — the highest level in eight months. Economists warn that this makes claims of “peak inflation” look premature.
The PPI data also has important implications for the Federal Reserve. Several PPI components feed into the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index. Recent CPI and PPI readings suggest inflation is drifting further away from the Fed’s 2% target.
