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Producer Price Increases Exceed Forecast

“The increase in January’s PPI—which rose far more than the estimates, erasing last month’s decline—moderates expectations for disinflation over the year ahead.”

By Reade Pickert | February 16, 2023 at 03:08 PM
Photo: A factory floor in Kentucky. Photographer: Luke Sharrett A factory floor in Kentucky. Photographer: Luke Sharrett

U.S. producer prices rebounded in January by more than expected, underscoring persistent inflationary pressures that could push the Federal Reserve to pursue further interest-rate increases in the months ahead.

The producer price index (PPI) for final demand jumped 0.7 percent last month, the most since June and bolstered by higher energy costs, according to data out Thursday from the Bureau of Labor Statistics (BLS). The PPI climbed 6 percent from a year earlier.

The median estimates in a Bloomberg survey of economists called for the index to increase 0.4 percent from a month earlier and 5.4 percent from January 2022. The S&P 500 fell and Treasury yields rose after the report.

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