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Services lift US producer prices in November | CNBC

U.S. producer prices unexpectedly rose in November as increases in the costs for services offset a sharp decline for energy products, but the overall momentum in wholesale inflation appears to be slowing.

The Labor Department said on Tuesday its producer price index for final demand edged up 0.1 percent last month after jumping 0.6 percent in October.

In the 12 months through November, the PPI rose 2.5 percent, slowing from October’s 2.9 percent surge. Economists polled by Reuters had forecast the PPI to be unchanged in November and rise 2.5 percent on a year-on-year basis.

A key gauge of underlying producer price pressures that excludes food, energy and trade services increased 0.3 percent last month. The so-called core PPI gained 0.2 percent in October. In the 12 months through November, the core PPI increased 2.8 percent, matching October’s gain.

Inflation measures have been softening. The Federal Reserve’s preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, increased 1.8 percent in October. That was the smallest gain since February and followed a 1.9 percent increase in September.

The core PCE price index hit the U.S. central bank’s 2 percent inflation target in March for the first time since April 2012. The Fed is expected to raise interest rates next week for the fourth time this year.

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Services lift US producer prices in November.

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