Wholesale prices rose more than expected in January. It comes a day after government data showed an unexpected rise in consumer inflation last month.
The Labor Bureau's producer price index rose 3.4% in January and a year ago, blew past expectations for a 3.2% rise, the Labor Statistics Bureau said Thursday.
That comes after Wednesday's data showed Wednesday's rise by 3% last month. Prior to the economists' forecast, it is already forecast to earn a sudden 2.9% profit in December.
The latest wholesale figure has even blew investors' hopes for interest rate cuts in the near future, and even feared central bankers might be seduced to raise interest rates.
The PPI report states that “we will make the Federal Reserve path far more clear as inflation will actually repeat itself in January and there will definitely be zero reasons for zero chances to cut interest rates. We are checking it,” confirms Paul Stanley, chief investment officer at Granite Bay Wealth Management. I said in a note.
The S&P 500 and Dow Jones ticked below 1% on Thursday as severe inflation was shocked after Wednesday's CPI report.
For example, some of the PPI data that eases healthcare costs suggest that personal spending could be softer than traders feared. The PCE, scheduled to be released on February 28th, is the Fed's main inflation gauge.
According to government data, PPI rose 0.4% in January compared to the previous month, with a jump of 0.2%. Wholesale prices rose 0.5% in December.
President Trump on Wednesday He hit his predecessor, Joe Biden. In the case of the Downbeat Consumer Report, which collected data from Democrats last month.
The president also put new pressure on Federal Reserve Chairman Jerome Powell to quickly cut the rate significantly.
“We need to lower our interest rates. This is something we'll go hand in hand with upcoming tariffs!!! Rock and Roll, America, America!!!” he wrote in a post on True Social on Wednesday morning.
Federal Reserve Chairman Jerome Powell on Wednesday said the central bank had made “great progress” in inflation while testifying before the House Financial Services Committee. So for now, we want to maintain policy restrictions. ”
Over the past 12 months, core wholesale prices excluding unstable food and energy prices have risen 3.6%, the Labor Bureau said Thursday.
According to data, core wholesale prices rose 0.1% in January, lower than the expected 0.3% jump.
Data shows that over a third of the January wholesale inflation rate was caused by rising hotel and motel prices and a 5.7% increase in motel prices.
A 10.4% increase in diesel fuel prices also contributes significantly to the figures of wholesale inflation numbers, and rising egg prices, as a case of ramp extension for avian influenza, causes shortages.
National retail prices for large white eggs in cages rose by about 25% from the previous month in January, according to the U.S. Agriculture Agency.
According to Bill Adams, chief economist at Comerica Bank, the PPI report did not reveal anything new or shocking that central bankers will shake up to change their rate cut stance.
“They are pending for the near future, and if many momentum prices like homes and housing rents continue to cool down and offset the upward pressure on economic inflation from post-election changes, then in 2025. There is no guarantee that a single rate reduction will be made, but it is probably not guaranteed. Policy,” Adams said in the memo.
Some economists have warned that taxes could reheat inflation, but some economists say they have a stake in some Trump policies, including heavy tariffs and large deportation. It is unclear whether this will affect the situation.
“The revival of inflation comes at a unique time as the economy is a tariff orthodontic device and if sustained, it could potentially impose yet another inflationary pressure,” Stanley said.
