WASHINGTON, (Reuters) – U.S. producer prices fell in December amid indications that tight supply chains are starting to relax. These signs suggest that inflation may have peaked.

After rising 1.0% in November, the producer price index for final consumption increased by 0.2%. PPI rose 0.5% in November as wholesale prices increased by 0.5%. This follows a jump of 0.9% in November.

After rising 1.1% the previous month, goods prices dropped 0.4%. These were held back by drops in energy and wholesale food prices. Prices for goods rose, but not food or energy.

After an increase of 0.8% in November, 0.5% is now 0.5%

The PPI grew 9.7% in December after climbing 9.8% in November.

PPI data were revised by the government from August to November last year due to late submissions and corrections made by respondents.

Reuters polled economists and predicted that the PPI would rise 0.4% per month, while rising 9.8% annually.

Fed’s inflation target is 2% As COVID-19, the recovery from the pandemic and other factors have led to bottlenecks in supply chains, inflation is on the rise. According to the government, December’s consumer price rise was 7%, the highest increase since June 1982.

There is an optimistic view that the price pressures will soon peak. A survey by the Institute for Supply Management revealed that suppliers reported higher December deliveries.

The volatile trade services, energy and food components of the market accounted for 0.4% increase in producer prices. Core PPI rose 0.8% in November. The core PPI grew 6.9% in the twelve months to December. This is the same increase as November.