US Producer Prices Rise More Than Expected in December

Uptick in services inflation drives 0.5% increase, faster than economists forecast

Jan. 30, 2026 at 8:55am

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U.S. wholesale prices rose a hotter-than-expected 0.5% in December, according to the Labor Department's producer price index report. The increase was the fastest pace in three months and exceeded the 0.3% economists had forecast. The rise was mostly driven by fatter profit margins at wholesalers and retailers, as services prices jumped 0.7% from November.

Why it matters

The producer price index measures inflation before it hits consumers, so the faster-than-expected increase could signal that consumer prices may also rise more than anticipated in the coming months. This data is closely watched by the Federal Reserve as it considers future interest rate decisions.

The details

The 0.5% increase in producer prices in December was the biggest jump since September. Prices for goods were unchanged last month but were up 2.5% from a year earlier. The report was delayed by over two weeks due to the federal government shutdown last fall.

  • The producer price index rose 0.5% from November to December 2025.
  • Compared to December 2024, producer prices were up 3% in December 2025.

The players

U.S. Labor Department

The government agency that released the producer price index report.

Federal Reserve

The central banking system of the United States, which closely monitors inflation data like the producer price index when considering interest rate decisions.

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What’s next

The Labor Department will release the consumer price index report in the coming weeks, which will provide further insight into the state of inflation in the U.S.

The takeaway

The faster-than-expected rise in producer prices, driven by an uptick in services inflation, suggests that consumer prices may also be poised to increase more than anticipated in the near future, potentially leading the Federal Reserve to consider further interest rate hikes.