Producer prices posted their fifth consecutive monthly rise in November. However, a minimal 0.1 percent increase was the smallest of the sequence and saw annual PPI inflation slide from 2.7 percent to 2.5 percent, its weakest outturn since July.
In fact, the monthly gain was wholly attributable to a 0.6 percent jump in energy, without which the PPI would have declined 0.1 percent to reduce the yearly core rate by 0.4 percentage points to 2.3 percent. Elsewhere, consumer goods were down 0.3 percent versus October and basics were off 0.1 percent while capital goods edged just 0.1 percent firmer.
November's deceleration makes for a broadly flat trend in underlying PPI inflation. Diminishing spare capacity suggests that prices should be picking up momentum but, for now at least, pipeline pressure from industry on CPI inflation remains relatively benign. This may change in 2018.