Economic Release Snapshot: Producer Inflation Increased in November

Each week, we break down the latest U.S. economic reports, including what the results mean for the overall health of the economy. Here, you will find how economists’ forecasts compare with actual results, key takeaways to consider, as well as a list of what’s on tap for the week ahead. 

Reports for the Week of December 5

ISM Services, November (Monday)

• Expected/prior ISM Manufacturing index: 53.5/54.4
• Actual ISM Manufacturing index: 56.5

Service sector confidence increased more than expected in November, as the holiday season helped bolster service sector sentiment.

International trade report, October (Tuesday)

• Expected/prior trade deficit: –$80.0 billion/–$74.1 billion
• Actual trade deficit: –$78.2 billion

The trade deficit widened by less than expected in October as imports increased while exports fell. Despite the widening, the monthly deficit remained well below the record of nearly $107 billion we saw in March.

Producer Price Index, November (Friday)

• Prior monthly PPI/core PPI growth: +0.3%/+0.1%
• Expected monthly PPI/core PPI growth: +0.2%/+0.2%
• Actual monthly PPI/core PPI growth: +0.3%/+0.4%
• Prior year-over-year PPI/core PPI growth: +8.1%/+6.8%
• Expected year-over-year PPI/core PPI growth: +7.2%/+5.9%
• Actual year-over-year PPI/core PPI growth: +7.4%/+6.2%

Producer prices increased slightly more than expected in November; however, on a year-over-year basis, producer inflation declined. The larger-than-expected rise in producer prices in November is a reminder that real work still needs to be done to get inflation under control.

University of Michigan consumer sentiment, December preliminary

• Expected/prior month sentiment: 57.0/56.8
• Actual sentiment: 59.2

Consumer sentiment improved more than expected to start December, driven, in part, by falling short-term inflation expectations.

Upcoming Reports for the Week of December 12

Consumer Price Index, November (Tuesday)
Consumer prices are set to increase modestly during the month yet show a continued slowdown in year-over-year growth.

FOMC rate decision (Wednesday)
The Fed is expected to hike the federal funds rate 50 bps at its December meeting in an attempt to combat inflation as we head into the new year.

Retail sales, November (Thursday)
Economists expected to see slowing headline sales in November, partially due to falling gas prices.