U.S. PPI rises to 3.0% in December, beating expectations

US producer price inflation ended December at 3.0%, beating the 2.7% forecast and landing hotter than markets expected. Core producer prices climbed to 3.3%, above the 2.9% estimate, and reached the highest level since July 2025.

This data came in during the first year of Donald Trump’s second term as the 47th president, with price pressure still building inside supply chains.

The monthly jump was driven by services. The final demand services index rose 0.7%, while final demand goods showed no change.

Core producer inflation has now moved higher for eight straight months, showing steady pressure beneath the surface. The measure that removes food, energy, and trade services increased 0.4% in December. That same category rose 3.5% during 2025, after a 3.6% increase in 2024.

Services drive producer prices higher

Final demand services posted their largest gain since July, when prices had climbed 0.9%. In December, two-thirds of the increase came from a 1.7% surge in trade service margins, which track what wholesalers and retailers earn.

Prices excluding trade, transportation, and warehousing increased 0.3%, while transportation and warehousing alone rose 0.5%.

More than 40% of the monthly services rise was tied to machinery and equipment wholesaling margins, which jumped 4.5%. Other areas that moved higher included guestroom rental, food and alcohol retailing, health and beauty retail, optical goods, portfolio management, and airline passenger services.

On the downside, bundled wired telecom services fell 4.4%. Automotive fuel retailing and long-distance motor carrying also declined.

Final demand goods were flat after a 0.8% increase in November. Prices excluding food and energy rose 0.4%, offset by a 1.4% drop in energy prices and a 0.3% decline in food prices. Nonferrous metals rose 4.5%, while residential natural gas, motor vehicles, soft drinks, and aircraft equipment moved higher. Diesel fuel plunged 14.6%. Gasoline, jet fuel, beef, veal, and iron and steel scrap all fell.

Over the full year, headline producer inflation reached 3.0%, while the core measure finished at 3.5%, according to revised data from August through November.

Intermediate demand prices climb across supply stages

Intermediate demand showed uneven moves. Processed goods slipped 0.1%, unprocessed goods jumped 2.3%, and services advanced 0.7%. Processed energy goods dropped 2.4%, while processed food prices fell 1.3%.

Materials excluding food and energy rose 0.7%. Diesel fuel again led declines, down 14.6%, alongside jet fuel and gasoline. Nonferrous mill shapes rose 2.6%, while utility natural gas, electric power, and synthetic plasticizers increased.

Unprocessed goods recorded their largest gain since January, driven by energy materials up 5.5%. Natural gas jumped 34.8%. Raw milk, metal ores, scrap, and livestock prices rose. Slaughter hogs fell 10.1%, while crude petroleum and carbon steel scrap declined. Despite December’s rise, unprocessed goods prices fell 0.3% in 2025 after climbing in 2024.

By production stage, stage 4 prices rose 0.6%, stage 3 increased 0.2%, stage 2 surged 1.4%, and stage 1 advanced 0.5%. Services pushed most gains, while diesel fuel continued to drag.

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