Wholesale prices rose 0.4% in January to reach an annual increase of 3.5%, falling below consumer inflation, which for the first time since the second quarter of 2024.
Producer Price Index (PPI), a measure of wholesale prices that companies pay each other before selling to consumers, 0.6% for final demand products, 0.3% for last month's final demand services, 0.3% for labor bureau Reported on Thursday.
Consensus estimates that the 3.5% increase exceeded expectations as economists predicted a 3.2% increase in PPI.
Wholesale prices are more volatile than retail prices and are moving more than retail prices, but were contracting over the fall, but were checked into positive areas in November and December, with 1.5% last month It increased by 1.5% each year.
Within the service, traveller accommodation costs have increased by 5.7%, accounting for more than a third of the increase in service PPI, the Labor Bureau said.
Within the products, a 10.4% increase in diesel fuel economy prices was a “major factor” in the overall increase in final demand products.
“Wholesale price growth was slightly higher than expected in January, with December readings adjusted upwards. In other words, inflation at the producer level remains high,” said Naruwallet's economist. Elizabeth Rental is written in Thursday's commentary.
Analysts also noted the rise in input prices during the middle stages of production.
“Since 2023, early-stage intermediate-demand input prices have risen at the fastest pace, meaning companies are seeing raw inputs rising across products and services.”
The consumer price index (CPI) prices have risen for the fourth consecutive month, steadily rising from a 2.4% increase in September to a 3% increase in January.
These increases came as the Federal Reserve began cutting interest rates into the fall, cutting half first in September. Changes in interest rates by the Fed usually take months to progress through the economy, and central banks have faced criticism that they have been phased in line with price movements.
The Thursday hot count in PPI could reinforce the argument that the Fed should continue to suspend the reduction rate.
“We know Fed Chair Powell says they're moving cautiously with some kind of rate adjustment. This week (if not already) the campaign to beat inflation is not far away. it became clear,” Renter said.
