In November, the unexpected rise of 0.4% in wholesale prices exceeded expectations.

The Bureau of Labor Statistics reported on Thursday that wholesale prices rose more than expected in November, fueling the belief that inflation progress has slowed.

The producer price index, which measures the final-demand stage prices for producers' products, increased by 0.4% for the month, exceeding the Dow Jones consensus estimate of 0.2%. On an annual basis, PPI rose by 3%, marking the largest increase since February 2023.

The core PPI increased by 0.2%, but when trade services were subtracted, the increase was only 0.1%.

The Labor Department reported that first-time claims for unemployment insurance totaled 242,000 for the week ending Dec. 7, which was higher than the forecast of 220,000 and up 17,000 from the previous period.

On the inflation front, the news was mixed.

Food prices accounted for 80% of the 0.7% increase in final-demand goods prices in the month, marking the largest move since February of this year, according to the BLS.

The BLS reported that egg prices at the retail level increased by 8.2% on the month and 37.5% from a year ago, while chicken eggs soared 54.6% in the food category, joining an across-the-board acceleration in items such as dry vegetables, fresh fruits, and poultry.

The BLS reported that the consumer price index nudged higher in November to 2.7% on a 12-month basis and 0.3% month over month, and the PPI release followed a day later.

Although inflation appears to be unyielding, the markets anticipate that the Federal Reserve will decrease its key overnight borrowing rate next week. Futures traders are indicating a high probability of a 0.25% reduction during the Federal Open Market Committee's meeting on Wednesday.

The stock market futures were in negative territory after the economic news, while treasury yields were mixed and the odds of a rate cut next week remained around 95%.

The labor market is becoming a growing concern for Fed officials, as nonfarm payrolls have slowed down in recent months and layoffs may be on the rise as unemployment persists.

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