Wholesale US Inflation Slows for Fifth Straight Month

November wholesale prices in the US fell to 7.4% from a year earlier, a fifth successive easing and another early signal that inflationary pressures are easing. The latest yearly figure was lower than October’s 8% level and down from an 11.7% peak in March. 

Rising prices are still eroding consumer finances, particularly for food, rent and services, such as medical care and restaurant meals. However, several emerging trends have combined to put the brakes on inflation from its four-decade top speed in the middle of the year. 

Gas prices have fallen after peaking at $5 a gallon in June. Also, the supply-chain backlogs responsible for chronic shipping delays and shortages of many goods are reducing. Shipping costs from Asia are also back to pre-pandemic levels, causing prices on non-perishable goods from used cars to furniture items to ease.

The latest trends reflect a continuing shift in inflation from goods to services. The cost of goods rose just 0.1% from October to November, with wholesale gas prices tumbling 6%. Food prices were an exception, jumping 3.3% last month. By contrast, services’ prices increased more, up 0.4%, led mostly by more expensive financial services.

Analysts agree that overall inflation is trending downward, although at a slow pace. The Federal Reserve has said its monetary policy tightening plans will remain aggressive until clear, consistent signs of reduced inflation are there for all to see.