U.S. November PPI lifted by chicken eggs, Initial Claims bounce in early December
Initial claims rose surprisingly sharply in the week t December 7, to an 8-week high of 242k from 225k, which hints at potentially slower growth in the December non-farm payroll, which will be surveyed next week. November PPI with a 0.4% rise overall was stronger than expected, but the ex food and energy gain was subdued at 0.2% and ex food, energy and trade softer still at 0.1%.
The rise in initial claims has no obvious special factors such as the hurricanes that lifted claims in early October. There could be some seasonal adjustment difficulties as the holiday season approaches, though it was last week’s data that contained the Thanksgiving holiday. It may be that the low levels in November were misleadingly low in correction from the preceding boost coming from the hurricanes.
Continued claims, covering the week before initial claims, rose by 15k to 1.886m after a preceding 26k decline. The 4-week average nudged marginally higher, erasing last week’s dip off a recent peak.
The upside surprise in PPI came from a 3.1% rise in food which came from a 54.6% surge in the price of chicken eggs.
Energy was subdued with a 0.2% increase which matched the 0.2% ex food and energy gain. The latter was a slowing from a slightly above trend 0.3% rise in October, as was an even softer 0.1% rise ex food, energy and trade.
Yr/yr PPI accelerated to 3.0% from an upwardly revised 2.6% and while yr/yr ex food and energy PPI was unchanged at 3.4% October was revised up from 3.1%. That brings the rate closer to that ex food, energy and trade, which was unchanged at 3.5%, in this case with October being unrevised.
