The Labor Department announced the U.S Producer Prices Index (PPI) report on Wednesday. Coming in short of the expectations, the report saw the U.S dollar index modestly drop later in the day.
On Tuesday, the department had revealed the U.S consumer prices to have marginally gained in December. The data had also provided an insight into the softer than expected inflation despite a remarkably low unemployment rate in the U.S that recently approached a 50-year low. The economic expansion, as per the previous data, has also started its 11th year that marks the longest in the history of the United States.
U.S Labor Department Announced December’s PPI At 0.1%
Wednesday’s data highlighted December’s PPI to have risen by 0.1%. In November, the index had remained unchanged (0.0%), following which, analysts had anticipated the producer prices to tick up by 0.2% in December. The data also reported PPI’s gain in the past 12 months ending in December at 1.3%. The figure was capped at 1.1% in November. The 1.3% annual gain in 2019 marked the weakest since 2015. The year over year growth of 1.3% in the U.S PPI, however, aligned with the expert’s forecast.
Excluding the energy and food components known for volatility, the index still posted a 0.1% increase in December after noting no change in November. On the core-PPI front, the Labor Department declared a 1.5% annual growth in 2019 that was also branded the weakest since 2015.
The U.S Federal Reserve currently has an annual inflation target of 2%. For taking monetary policy decisions, the FED relies heavily on the core personal consumption expenditures (PCE) price index. On a year over year basis, PCE saw a 1.6% gain in November. December’s data is expected to be publicized towards the end of the month.
Other Significant U.S Economic Data Released Recently
Other significant economic data for the United States that has recently been announced include the U.S Federal Reserve deciding in favor of keeping the rates unchanged in its December meeting and hinting at extending the same strategy through 2020. The bank anticipated inflation to remain soft this year. It further added that the U.S unemployment rate is currently at a historic low of 3.5% while the annual growth in wages still dropped back below 3% in December.
The forex market didn’t respond aggressively to the economic data on Wednesday as traders continued to keep their focus on the post-phase 1 trade deal between the U.S and China scenario to build their strategies moving forward.