By Nathalie Voit
Wholesale prices rose 0.2% in December, weaker than expected but still up 9.7% year-over-year, the Department of Labor said Jan. 13.
December’s dismal rise was in sharp contrast to the 1.0% gain posted in November and October’s 0.6% hike. The Dow Jones estimate had predicted a monthly gain of 0.4%.
Still, producer prices soared 9.7% in the twelve months leading through 2021, the largest calendar-year increase since the agency began collecting data in 2010.
The core producer price index, which excludes the volatile food and energy categories, climbed 0.4% in December, following a 0.8% gain in November. On a 12-month basis, the core producer price index jumped 6.9%, significantly greater than the 2020s 1.3% advance.
Prices for final demand energy slid 3.3%, while the index for final demand foods also fell for the month by 0.6%. Trade prices rose 0.8%, while transportation and warehousing costs jumped 1.7%.
The agency said that December’s decline was driven by falling gas prices, which slid 6.1% for the month.
Meanwhile, a separate report released by the department on Thursday revealed initial jobless claims topped 230,000 in the week ending Jan. 8, an increase of 23,000 from the previous week’s level and well above the 200,000-estimate predicted by economists.
However, as of the past two months, applications are still near pre-pandemic lows, according to the department.
The 4-week moving average for last week rose 6,250 to settle at 210,750, edging higher but still near record-low levels.
Continuing claims, a proxy for people on long-term jobless benefits, fell by 194,000 to 1.56 million during the week ending Jan.1, the lowest level since June 1973.
“The rise in claims likely reflects an increase in layoffs due to the surge in COVID cases,” said economists Nancy Vanden Houten and Kathy Bostjancic of Oxford Economics, according to ABC News.
“Claims may remain elevated in the near term, but we expect initial claims will gravitate back to the 200k level once the omicron wave passes. Encouragingly, there are indications that cases from the omicron variant are peaking.”