The latest U.S. Producer Price Index (PPI) report for November 2025, released by the Bureau of Labor Statistics, indicates a modest firming of inflation at the wholesale level. The PPI for final demand increased by 0.2% month-over-month, up from a 0.1% gain in October. On an annual basis, producer inflation accelerated to 3.0%, surpassing economist forecasts of 2.7% and signaling persistent price pressures.
The monthly increase was driven almost entirely by goods prices, which jumped 0.9%—the largest rise since February 2024. Energy prices surged 4.6%, accounting for more than 80% of the goods inflation, with gasoline prices spiking 10.5%. In contrast, food prices were unchanged, and services prices were flat overall.
Core PPI, which excludes food, energy, and trade services, rose 0.2% for the month. On a 12-month basis, this core measure climbed 3.5%, matching its highest annual increase since March. This suggests underlying cost pressures remain sticky beyond volatile energy components.
Separate data from the Commerce Department showed retail sales rebounded strongly, rising 0.6% in November to $735.9 billion, beating expectations. This indicates continued consumer resilience despite upstream inflation. However, economists note spending strength is uneven, with higher-income households driving growth while lower-income consumers face strain from rising living costs.
The data, delayed due to backlogs from last year's government shutdown, reinforces expectations that inflation risks persist into early 2026, presenting a complex backdrop for Federal Reserve policymakers and financial markets.
