Wholesale inflation showed signs of cooling in November, coming in below market expectations, while American consumers continued to spend at a strong pace, according to economic data released on Wednesday. The combination of easing price pressures at the producer level and resilient consumer demand offers a mixed picture of the U.S. economy as the year approaches its end.

The Producer Price Index, which tracks the prices received by producers for goods and services at the final demand stage, increased by 0.2 percent in November on a seasonally adjusted basis, according to the Bureau of Labor Statistics. Economists surveyed by Dow Jones had anticipated a slightly stronger increase of 0.3 percent. Although the November reading was marginally higher than October’s figure, it still suggested slower-than-expected momentum in wholesale price growth.

When volatile food and energy components were removed, the core PPI showed no change from the previous month. This was notably weaker than forecasts that had called for a 0.2 percent increase, reinforcing the view that underlying inflation pressures at the production level may be stabilizing.

Despite the modest monthly gains, year-over-year inflation at the producer level remains elevated. Headline PPI was up 3 percent compared with November of last year, a level that continues to exceed the Federal Reserve’s long-term inflation goal of 2 percent. Even more striking, the core PPI excluding trade services rose 3.5 percent over the past 12 months. According to the BLS, this marked the strongest annual increase since March 2025, highlighting persistent price pressures in certain segments of the economy.

Much of the monthly increase in producer prices was driven by higher goods costs. Goods prices climbed 0.9 percent in November, with energy playing a dominant role. More than 80 percent of the goods price increase was attributed to a sharp 4.6 percent rise in energy prices. In contrast, prices for services showed little movement during the month, remaining essentially unchanged.

While wholesale inflation data came in softer than expected, consumer spending painted a more robust picture. Retail sales rose 0.6 percent in November, according to figures released by the Commerce Department. The data were adjusted for seasonal factors but did not account for inflation. Economists had projected a smaller gain of 0.4 percent, making the actual increase a positive surprise.

Even after excluding automobile sales, which can be volatile from month to month, retail spending increased by 0.5 percent. This also exceeded expectations, which had called for a 0.3 percent rise. The figures suggest that consumers remained willing to spend despite higher borrowing costs and ongoing concerns about inflation.

The gains in November retail sales were widespread across multiple categories. Motor vehicle and parts dealers posted strong growth, as did building material and garden supply stores. Gas stations also saw notable increases, reflecting both higher fuel prices and steady demand. Sporting goods retailers and a range of miscellaneous store categories recorded monthly gains exceeding 1 percent, indicating broad-based consumer engagement rather than spending concentrated in a single sector.

Looking at the longer-term trend, retail sales increased 3.3 percent compared with the same period a year earlier. This growth rate exceeded the 2.7 percent annual rise in the Consumer Price Index for November, suggesting that real consumer spending continued to expand. The so-called control group of retail sales, which excludes categories such as autos, gasoline, and building materials and feeds directly into gross domestic product calculations, rose 0.4 percent. This result aligned closely with market expectations and points to steady underlying economic growth.

It is worth noting that some government economic reports remain delayed. The Bureau of Labor Statistics continues to operate behind schedule on certain PPI releases due to disruptions caused by last year’s government shutdown. Retail sales data have also experienced reporting lags, adding a degree of uncertainty to short-term economic assessments.

Financial markets showed little reaction to the latest data. Stock futures edged lower following the releases, while Treasury yields remained largely unchanged. Investors appeared to view the reports as broadly in line with the current economic narrative rather than a catalyst for immediate market moves.

In terms of monetary policy expectations, traders continued to assign almost no probability to an interest rate change at the Federal Reserve’s upcoming meeting later this month. The combination of easing monthly inflation readings and resilient consumer spending supports the view that the Fed can afford to remain patient as it evaluates the cumulative impact of its previous policy actions.

Overall, the November data suggest an economy that is gradually seeing inflation pressures cool at the producer level, even as consumers maintain a strong appetite for spending. This balance will remain a key focus for policymakers and investors as they assess the trajectory of inflation, growth, and interest rates in the months ahead.