Today, The USA Labor Department reported an increase of 0.3% from December to January of the Producer Price Index (PPI) after that it reduced from November to December of 0.1%.
Measured year over year, producer prices rose by a mild 0.9% in January.
Excluding volatile food and energy costs, “core” wholesale prices rose 0.5%, the most since last July. Compared with a year ago, core prices climbed 2%, up from 1.7% in the previous month.
Some of the January rise was driven by increasing costs of hospital care, doctor visits and hotel. In addition, many companies impose price increases early in the calendar year, which often boosts overall inflation measures in January.
Producer price indices (PPI) in manufacturing measure the rate of change in prices of products sold as they leave the producer. They exclude any taxes, transport, and trade margins that the purchaser may have to pay. They are often seen as advanced indicators of price changes throughout the economy, including changes in the prices of consumer goods and services.
The wholesale figures follow a surprisingly hot report this week that showed that CPI eased less than expected last month, signaling that the pandemic-fueled inflation surge is only gradually and fitfully coming under control.
The results of today’s report reinforce the idea that FED will hold the interest rates more than previously expected.