Prices Paid to U.S. Producers Rose at Slower Pace in November

(Bloomberg) -- Prices paid to U.S. producers remained tame in November, indicating limited pricing power as the pandemic continues to weigh on the economy.

The producer price index rose 0.1% from a month earlier after a 0.3% gain in October, Labor Department figures showed Friday. The figure matched the median estimate in a Bloomberg survey of economists. The PPI climbed 0.8% from November 2019, marking the third year-over-year gain.

Excluding volatile food and energy components, the so-called core PPI rose 0.1% from a month earlier and was up 1.4% from a year ago. The median forecast called for a 0.2% monthly increase and a 1.5% annual gain.

The figures demonstrate the difficulties producers face in passing along higher raw materials costs against a backdrop of elevated unemployment and supply chain challenges. A government report on Thursday showed consumer prices in November compared with a year earlier remained subdued.

Producer prices excluding food, energy, and trade services -- a measure preferred by economists because it strips out the most volatile components -- also rose 0.1% in November from a month earlier after a 0.2% gain in October. Compared with a year earlier, those costs climbed 0.9%.

The cost of goods increased 0.4% from a month earlier, reflecting an acceleration in prices of energy. Almost half of the gain in the cost of goods was due to higher energy prices, particularly diesel fuel, the Labor Department said. Excluding food and fuel, goods prices rose 0.2%.

The index for final demand services was unchanged, snapping a six-month string of gains, after a 0.2% increase in October. The gauge of transportation and warehousing costs declined last month, while prices of outpatient care increased 0.4%.

©2020 Bloomberg L.P.