USA: Producer Price Index falls more than expected to 6.2%

• Producer Price Index falls 0.5% in December and falls back to 6.2% (annual).
• Core index up 0.1% in December, annual rate down to 5.5%.
• The dollar falls after the PPI and retail sales.

The Producer Price Index (PPI) registered a drop of 0.5% in December, while the market consensus was for a drop of 0.1%. In November there had been a rise of 0.2% (revised from 0.3%).

The PPI annual rate went from 7.3% (revised from 7.4%) to 6.2%, below the expected 6.8%. It is the lowest reading since March 2021.

The core PPI advanced 0.1% in December and the annual rate fell from 6.2% to 5.5%, lower than the 5.9% expected. The November rise was revised from 0.4% to 0.2%.

Retail sales figures were released at the same time, which were below expectations. The dollar fell in the market after the data, marking new lows against the yen, the pound and the currencies linked to commodities.

The round of data will continue with the industrial production report, then wholesale inventory data and the NAHB housing index. In the second half of the American session, the Federal Reserve will publish the Beige Book on the state of the economy.