US Producer Price Inflation Slows In December

After consumer prices rose as expected (with shelter cost growth slowing dramatically but food costs surging), producer prices rose less than expected in December, up just 0.3% (vs +0.4% exp). This left producer prices up just 0.8% YoY, the same as in November.

Source: Bloomberg

It appears government-imposed lockdowns trumped supply chain disruptions with core PPI slowing from +1.4% in November to +1.2% in December (below the 1.3% expected).

Clearly, the pandemic response is continuing to limit pricing power.