Wholesale Prices in US Climb by Most Since September 2012
Otis Underwood | February 15, 2017, 0:12
Moreover, the department said, wholesale food prices were unchanged after climbing 0.5% in December.
USA producer prices rose more than expected in January, recording their largest gain in four years amid increases in the cost of energy products and some services, but a strong dollar continued to keep underlying inflation tame.
If prices continue to rise, the Federal Reserve could take a more aggressive approach to raise interest rates to squelch any potential for inflation to overshoot the central bank's 2% to 2.5% target, based on broader measure of inflation.
Economists polled by Reuters had forecast the PPI rising 0.3 percent last month and the year-on-year increase moderating to 1.5 percent.
Last month, prices for final demand goods increased 1.0 percent, the largest rise since May 2015.
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United States producer prices index for final demand rose 0.6% in January following a 0.2% rise the previous month and this was higher than consensus forecasts of a 0.3% increase for the month. The increase followed a 0.6 percent gain in December.
The underlying increase was also higher at 0.4% from 0.3% previously and compared with an expected 0.2% increase. Over the past 12 months wholesale costs have risen 1.6%, but as recently as one year ago they were basically negative.
Margins for retailers also climbed sharply in January, though it's a volatile category that swings sharply from month to month and often skews the wholesale report.
Excluding food and energy, wholesale prices rose 0.4 percent from the previous month after a 0.1 percent rise. Much of the advance was due to the index for final demand trade services, which increased by 0.9%. The other two are import costs and consumer prices.