The Labor Department reported Tuesday that its producer price index — which tracks inflation before it hits consumers — rose 0.2% last month from November, down from a 0.4% gain the month before. Compared with a year earlier, producer prices rose 3.3%, biggest jump since February 2023 and up from a 3% gain in November.

U.S. producer prices rose less than expected in December as higher costs for goods were partially offset by stable services prices, suggesting inflation remained on a downward trend after progress had stalled in recent months.

Consumer Price Index showed an acceleration to 2.9%, the highest rate since July. With such high inflation, the Fed is unlikely to cut rates in January.

Where prices did climb — warehousing and transportation — points to an inventory build. Upcoming CPI will make the inflation picture clearer.

US stocks gained after cooler-than-expected producer price index data soothed inflation concerns. The numbers on Tuesday showed wholesale inflation rose 0.2% in December on a monthly basis, compared to an estimated 0.4% increase. The reading climbed 3.3% from a year ago, below the projected 3.5% gain.

There are growing concerns about the stickiness of inflation and fears that the Federal Reserve may have to keep interest rates restrictively high for longer.

Wall Street's main indexes were on track to open higher on Tuesday, as investors assessed softer-than-expected producer inflation to gauge the Federal Reserve's monetary policy trajectory this year. A Labor Department report showed the producer price index rose 3.

Learn about the latest Producer Price Index data for December 2024, showing a % increase from the previous month and meeting consensus expectations.

The producer price index, which measures the costs of goods traded between companies, rose 2.3% from the previous year to 122.6.

Producer prices rose less than expected in Dec, easing Fed's inflation concerns and providing relief to markets. Core PPI also flattened.

US wholesale inflation unexpectedly cooled in December, helped by a drop in food costs and flat services prices that may help temper concerns of lingering price pressures.

Stock futures rose ahead of December’s consumer price index report. The SEC sued Elon Musk over his 2022 purchase of Twitter. Six of President-elect Donald Trump's cabinet picks are set to face questioning in Senate confirmation hearings.