US producer prices rose at a slightly faster pace in November, while retail sales exceeded expectations, reinforcing signs that the American consumer remained resilient toward the end of the year even as price pressures persisted upstream.
Data released by the Bureau of Labor Statistics showed that the producer price index for final demand increased 0.2% month over month in November 2025, up from a 0.1% rise in October and in line with market expectations.
The release was delayed as federal statistical agencies continue to clear backlogs caused by last year’s prolonged government shutdown.
On an annual basis, headline producer inflation accelerated to 3.0% from 2.8%, outpacing economists’ forecasts of 2.7% and pointing to renewed price momentum at the wholesale level.
Core producer prices miss expectations
Core producer prices, which strip out volatile food and energy components, were unchanged on the month, following a 0.3% increase in October.
That reading came in below market expectations for a 0.2% rise, offering some reassurance that underlying inflation pressures remain contained in the near term.
However, year-on-year core producer inflation edged up to 3.0% from 2.9%, also exceeding forecasts of 2.7%.
The data suggest that while monthly price growth has cooled, annual inflation remains stubbornly elevated.
Prices for final demand services were flat in November, offsetting a 1.2% jump in final demand goods prices.
The divergence highlights ongoing supply-side pressures in goods markets even as service-sector inflation shows signs of stabilising.
Retail sales beat forecasts despite cost pressures
Separate data from the Commerce Department showed that US retail sales rebounded strongly in November, rising 0.6% to $735.9 billion.
That followed a downwardly revised 0.1% decline in October and surpassed expectations for a 0.4% increase from economists surveyed by The Wall Street Journal and Reuters.
The Census Bureau noted that the figures were released later than usual as it continues to catch up on reports delayed by the 43-day government shutdown, which disrupted data collection late last year.
Retail sales excluding autos, gasoline, building materials and food services, known as core retail sales, rose 0.4% in November after a downwardly revised 0.6% gain in October.
These measures most closely track the consumer spending component of gross domestic product.
Consumer resilience under scrutiny
The latest data underline the uneven nature of consumer strength.
Spending growth is being driven largely by higher-income households, while lower-income consumers are increasingly strained by the rising cost of living.
Government figures released earlier this week showed food prices rose by the most in more than three years in December, even as headline inflation remained moderate.
Economists say the economy appears more fragile than during the immediate post-pandemic boom, with greater slack in the labour market and uncertainty surrounding potential changes in federal trade and immigration policy.
Even so, personal consumption, which accounts for more than two-thirds of economic output, has remained robust.
Growth outlook remains upbeat
Strong consumer spending helped power economic growth at a 4.3% annualised pace in the third quarter.
The Atlanta Federal Reserve is currently estimating that GDP expanded at a 5.1% rate in the fourth quarter.
Americans’ continued willingness to spend has supported optimistic forecasts for 2026, alongside expectations of favourable tax changes and reduced policy volatility in the second year of President Donald Trump’s second term.
Federal Reserve policymakers in December projected faster growth in 2026 than in 2025, a view shared by many Wall Street economists.
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