HomeFinance NewsEconomyInflation takes a Dive: Prices Unexpectedly Drop, Bringing Relief to Consumers

Inflation takes a Dive: Prices Unexpectedly Drop, Bringing Relief to Consumers


Wholesale prices unexpectedly fell 0.1% in December in positive inflation sign


Wholesale prices unexpectedly fell in December, indicating a positive signal for inflation.

The producer price index (PPI) declined 0.1% for the month and was up 1% from the previous year.

Economists had predicted it would remain unchanged.

Excluding food and energy, core PPI was stable, contrary to the forecasted 0.2% increase.

For the entire year, the final demand measure, minus food, energy, and trade services, grew by 2.5%, a significant decrease from its 4.7% increase in 2022.

In contrast, prices that consumers pay for goods and services, measured by the consumer price index (CPI), rose 0.3% in December and 3.4% annually.

This exceeded expectations and remained above the Fed’s 2% inflation target.

Markets reacted positively to the PPI report, and traders anticipate the Fed cutting interest rates starting in March, despite inflation being above the target.

However, various Fed officials have expressed caution against aggressive interest rate cuts, emphasizing the need for continued vigilance in combating inflation.

  • Overall sentiment: positive
  • Positive

    “Wholesale prices unexpectedly declined in December, providing a positive signal for inflation, the Labor Department reported Friday.”

    “Prices for final demand goods declined 0.4% in December, the third straight month of decreases, according to the release.”


    “The producer price index, a gauge of wholesale prices, fell 0.1% for the month and ended 2023 up 1% from a year ago, the Labor Department reported Friday.”

    “That was higher than Wall Street expectations and still a good deal away from the Fed’s 2% inflation target.”

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