U.S. producer prices rose in November for the first time in four months, driven up by higher profit margins for retailers and wholesalers and a jump in shipping costs. Despite the increase, prices have barely risen in the past year and inflation is largely tame.
The producer price index, which measures prices before they reach the consumer, increased 0.3 percent in November, the Labor Department said Friday. Yet in the past year, producer prices fell 1.1 percent. Excluding the volatile food and energy categories, core prices also rose 0.3 percent, and are up just 0.5 percent in the past year.
Wholesale food prices rose 0.3 percent last month, driven higher by the biggest jump in butter prices in 15 years and a nearly 12 percent increase in fresh fruit and melon costs.
Wholesale prices were pushed up last month by higher profit margins for clothing retailers and gas stations, and because of a jump in shipping costs. Those increases offset a 1.3 percent decline in gas prices. The cost of natural gas plummeted 3.1 percent, the most since February.
The declines in energy prices will likely continue, as oil prices have fallen sharply this week to below $38 a barrel. That should lower prices at the pump in the coming months.
A gallon of gas averaged $2.01 nationwide Thursday, according to AAA. That’s down 11 cents from last month and is 63 cents cheaper than a year ago.
Most consumers are seeing limited price increases during the year-end shopping season. Consumer prices rose just 0.2 percent in October from a year earlier. Excluding food and energy, core consumer prices rose 1.9 percent in the previous 12 months.
Inflation remains low even as the Federal Reserve nears its first rate hike in nearly a decade. Most analysts expect that the Fed will increase the short-term interest rate it controls after its Dec. 15-16 meeting.
According to the central bank’s preferred gauge, inflation has increased just 0.2 percent in the year ending in October. Core prices have risen just 1.3 percent during that time.