PPI Inflation Is Moderating

On Friday, we learned that November’s headline PPI inflation rate rose 0.3% m/m, higher than the 0.2% expected, and October’s increase was revised up from 0.2% to 0.3%. The good news is that the y/y comparisons showed that the PPI final demand inflation rate peaked at 11.7% during March and fell to 7.4% during November, the lowest since May 2021. Of course, that’s still too high, but it is falling at a relatively fast pace. Here is more good news, especially in the latest three-month annualized data:

(1) PPI final demand. While PPI final demand rose 7.4% y/y during November, the three-month annualized rate was only 3.5%. Here are the same happy comparisons for PPI final demand goods (9.6%, 4.1%) and PPI final demand services (5.9%, 2.9%).