US Core PPI MoM: November 2025 Release and Macro Implications
The US Core Producer Price Index (PPI) for November 2025 rose by 0.10% month-over-month (MoM), below the consensus estimate of 0.20% and reversing last month’s -0.10% decline. This subtle uptick signals a moderation in wholesale inflation pressures amid evolving economic conditions. Drawing on the Sigmanomics database, this report contextualizes the latest Core PPI reading against historical trends, explores macroeconomic drivers, and assesses implications for monetary policy, fiscal stance, and financial markets.
Table of Contents
The US Core PPI MoM increase of 0.10% in November 2025 marks a modest rebound after October’s 0.10% decline. Over the past 12 months, the average monthly Core PPI change has hovered near 0.25%, indicating a sustained but slowing inflationary trend at the wholesale level. This month’s print is the lowest positive reading since August’s 0.90% surge, reflecting easing input cost pressures.
Drivers this month
- Shelter-related inputs contributed approximately 0.18 percentage points (pp), supporting inflation persistence.
- Used vehicle prices exerted downward pressure, subtracting roughly -0.05 pp.
- Energy and food components were excluded from the core measure, but their volatility continues to influence broader inflation expectations.
Policy pulse
The 0.10% MoM increase remains below the Federal Reserve’s preferred inflation target range of 0.20%–0.30% monthly core PPI growth, suggesting that wholesale inflation pressures are easing. This supports the Fed’s cautious stance on further rate hikes, though vigilance remains due to persistent supply chain uncertainties.
Market lens
Immediate reaction: The US dollar index (USD) strengthened by 0.15% within the first hour post-release, while 2-year Treasury yields edged up 3 basis points, reflecting a tempered but still hawkish market interpretation. Breakeven inflation rates for 5 years remained steady near 2.30%, signaling stable medium-term inflation expectations.
Core PPI is a vital gauge of wholesale inflation excluding volatile food and energy prices. It often presages consumer inflation trends and influences monetary policy decisions. The November 2025 reading of 0.10% MoM is modest compared to the 0.90% spike in August and the -0.10% dip in October, highlighting volatility in input costs.
Historical comparisons
- August 2025: 0.90% MoM, reflecting supply chain rebounds post-pandemic disruptions.
- October 2025: -0.10% MoM, the first negative print since early 2024, signaling cooling pressures.
- 12-month average (Nov 2024–Oct 2025): ~0.25% MoM, indicating persistent but slowing inflation.
Monetary policy & financial conditions
The Federal Reserve’s recent pause in rate hikes aligns with the deceleration in core PPI. Financial conditions remain moderately tight, with the effective federal funds rate near 5.25%. Credit spreads have narrowed slightly, and equity markets show cautious optimism amid inflation moderation.
Fiscal policy & government budget
Fiscal stimulus remains restrained, with the 2025 federal budget deficit forecasted at 4.50% of GDP. Limited government spending growth tempers demand-pull inflation risks, complementing the Fed’s inflation-targeting efforts.
Chart insight
The Core PPI trend is reversing the two-month decline, but remains subdued relative to mid-2025 peaks. This suggests inflation pressures are contained but not fully abated, warranting close monitoring.
What This Chart Tells Us: Core PPI is trending upward after a brief dip, indicating inflation pressures are easing but still present. The moderation from summer highs points to a gradual cooling of wholesale price growth.
Market lens
Immediate reaction: The US dollar index (USD) rose 0.15%, reflecting cautious optimism. Short-term Treasury yields increased slightly, while inflation breakevens held steady, signaling balanced market sentiment.
Looking ahead, the Core PPI trajectory will be shaped by several factors including supply chain dynamics, labor market conditions, and global geopolitical risks. The Fed’s policy path remains data-dependent, with inflation prints like this guiding future rate decisions.
Scenario analysis
- Bullish (30% probability): Core PPI stabilizes near 0.10% MoM or lower, enabling the Fed to maintain a pause or begin rate cuts in mid-2026, supporting growth and equity markets.
- Base (50% probability): Core PPI fluctuates between 0.10% and 0.20% MoM, keeping inflation near target and prompting a cautious Fed stance with no immediate rate changes.
- Bearish (20% probability): Supply shocks or wage pressures push Core PPI above 0.30% MoM, forcing the Fed to resume tightening, risking slower growth and market volatility.
External shocks & geopolitical risks
Ongoing tensions in key commodity-producing regions and potential trade disruptions remain upside inflation risks. Conversely, improved global supply chains and easing energy prices could further temper wholesale inflation.
The November 2025 Core PPI MoM reading of 0.10% reflects a cautious easing of wholesale inflation pressures. While below expectations, it signals that inflation remains sticky, particularly in shelter and services inputs. Monetary policy is likely to remain data-driven, balancing inflation control with growth support. Market participants should watch for shifts in supply chain dynamics and geopolitical developments that could alter the inflation outlook.
Key Markets Likely to React to Core PPI MoM
The Core PPI is a critical inflation gauge that influences interest rates, currency strength, and equity valuations. Key markets to watch include:
- SPX: The S&P 500 index often reacts to inflation data via shifts in risk appetite and sector rotation.
- USDEUR: The USD/EUR currency pair responds to inflation-driven Fed policy expectations.
- BTCUSD: Bitcoin’s price can reflect inflation hedging demand and risk sentiment.
- TLT: Long-term Treasury ETFs like TLT react to inflation expectations and bond yield shifts.
- USDCAD: The USD/CAD pair is sensitive to commodity price changes and inflation trends.
Core PPI vs. SPX Since 2020
Since 2020, Core PPI MoM spikes have often preceded volatility in the S&P 500 (SPX). For example, the August 2025 0.90% surge coincided with a 5% SPX correction over the following month. Conversely, periods of Core PPI moderation, such as October 2025’s -0.10%, have aligned with SPX rebounds. This inverse relationship underscores inflation’s key role in equity market cycles.
FAQs
- What is the Core PPI MoM and why does it matter?
- The Core Producer Price Index (PPI) MoM measures wholesale inflation excluding food and energy. It signals underlying inflation trends that influence consumer prices and monetary policy.
- How does the November 2025 Core PPI compare historically?
- At 0.10% MoM, November’s reading is below the 12-month average of 0.25%, indicating easing inflation pressures after summer peaks.
- What are the implications for Federal Reserve policy?
- The subdued Core PPI supports a cautious Fed stance, likely maintaining current rates unless inflation accelerates unexpectedly.
Takeaway: The November 2025 Core PPI MoM print signals easing inflation pressures but persistent underlying stickiness, suggesting a steady but watchful monetary policy environment ahead.
Key Markets Likely to React to Core PPI MoM
The Core PPI MoM reading is a bellwether for inflation trends that directly impact interest rates, currency valuations, and equity market sentiment. The S&P 500 (SPX) often moves inversely to inflation surprises, while currency pairs like USD/EUR and USD/CAD adjust to shifts in Fed policy expectations. Treasury ETFs such as TLT reflect bond market responses to inflation data. Bitcoin (BTCUSD) also reacts as a potential inflation hedge and risk barometer.
Core PPI vs. SPX Since 2020
Core PPI spikes have historically preceded S&P 500 volatility. For example, the August 2025 0.90% Core PPI surge coincided with a 5% SPX drop over the next month. Conversely, Core PPI moderation often aligns with SPX gains, highlighting inflation’s influence on equity cycles.
FAQs
- What is the Core PPI MoM and why does it matter?
- The Core Producer Price Index (PPI) MoM measures wholesale inflation excluding food and energy. It signals underlying inflation trends that influence consumer prices and monetary policy.
- How does the November 2025 Core PPI compare historically?
- At 0.10% MoM, November’s reading is below the 12-month average of 0.25%, indicating easing inflation pressures after summer peaks.
- What are the implications for Federal Reserve policy?
- The subdued Core PPI supports a cautious Fed stance, likely maintaining current rates unless inflation accelerates unexpectedly.
Takeaway: The November 2025 Core PPI MoM print signals easing inflation pressures but persistent underlying stickiness, suggesting a steady but watchful monetary policy environment ahead.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
SPX – S&P 500 index, sensitive to inflation and monetary policy shifts.
USDEUR – USD/EUR currency pair, reacts to Fed policy and inflation data.
BTCUSD – Bitcoin/USD, often viewed as an inflation hedge and risk asset.
TLT – Long-term Treasury ETF, reflects bond market inflation expectations.
USDCAD – USD/CAD currency pair, influenced by commodity prices and inflation trends.
The November 2025 Core PPI MoM increase of 0.10% contrasts with October’s -0.10% decline and is well below the 12-month average of 0.25%. This signals a deceleration in wholesale inflation pressures after a volatile summer marked by a 0.90% surge in August.
Supply chain normalization and easing commodity prices have contributed to this moderation. However, shelter-related costs continue to exert upward pressure, reflecting persistent housing market tightness.