US November PPI final demand Y/Y +3.0% vs +2.7% expected

The latest data from the US Department of Labor reveals that the Producer Price Index (PPI) for November rose to +3.0% YoY, exceeding the market expectation of +2.7%. This marks an increase from the previous +2.7%, with a monthly change of +0.2%, aligning with forecasts. Core PPI also surpassed expectations at +3.0% YoY but showed no monthly change at +0.0%. The PPI increase is largely attributed to a 0.9% rise in the final demand goods index. However, since this data is from November, and with December's Consumer Price Index (CPI) taking precedence in market focus, its immediate impact is limited. The market is currently pricing in a 54 bps easing by 2024, but today's data is unlikely to have a significant effect. Recent Fedspeak indicates a reluctance for rate cuts, suggesting that deterioration in the labor market or unexpected inflation drops would be necessary for a faster pace of rate cuts. Overall, the market reaction to this PPI announcement has been minimal, leading to questions about the relevance of such economic indicators.