The Labor Department reported Thursday that its Producer Price Index rose two-tenths of a percentage point in December. That’s a slowdown from November, when prices rose one percent, and October, when prices rose six-tenths of a percentage point.
The 12-month increase in producer price inflation of 9.7 percent was also lower than a revised 9.8 percent increase for the 12 months ending in November. However, the government uses the December to December change for the yearly increase and on that basis the 9.7 percent rise was the fastest annual jump on record, far above the 0.8 percent increase in 2020 and the 1.4 percent rise in 2019.
The Producer Price Index measures prices from the point of view of sellers, in contrast with the better-0known Consumer Price Index’s focus on what households pay for goods and services they purchase. The two indexes tend to move in the same direction, although they can diverge from time to time. The PPI has been indicating more inflation than the CPI through most of the current surge. The headline numbers report “final demand” prices, goods and services sold to businesses, households, and governments for personal consumption, capital investment, public use, or export.