U.S. producer prices rose more than expected in November as energy prices spiked, but underlying inflation pressures remained subdued, according to Labor Department data released on Tuesday.
The producer price index, a measure of business costs, rose 0.8% last month, above forecasts for a 0.6% gain in a Reuters poll. Compared to the same month a year earlier, the PPI climbed a robust 3.5%.
Core producer prices -- which are favored by Federal Reserve policymakers because they exclude food and energy prices that are considered more erratic -- rose 0.3%, above estimates for a 0.2% increase. The yearly gain was 1.2%.
The Fed holds its regular policy meeting on Tuesday and is not expected to make any shifts to its policy of buying an additional $600 billion in government bonds to stimulate a frail economic recovery amid high unemployment and low inflation. Fed Chairman Ben Bernanke has indicated he would like to see inflation running at about 2% or a bit below.
The report highlighted the dissonance between the inflation measures used by policy officials and the everyday experience of businesses and consumers. Gasoline costs jumped 4.7% while the price of fruit soared 13.6%.