Wholesale prices in the United States picked up more than expected in January, according to Labor Department data released Thursday, bumped up by goods costs and fueled by higher gasoline prices.
This comes as policymakers look for signs that inflation is coming down in the long run, despite resilience in some sectors of the economy.
To rein in surging prices, the US central bank raised interest rates multiple times last year in hopes of cooling demand, with the interest-sensitive housing industry slumping.
Manufacturing activity in the highly industrialized Philadelphia area contracted for a sixth straight month in February, in separate report released Thursday, logging its lowest reading since May 2020 during the pandemic.
But the producer price index, a measure of wholesale inflation, bounced 0.7 percent in January from December, at a quicker pace than analysts predicted.
On an annual basis, PPI rose 6.0 percent last month, down from December’s reading.
A rise in prices for goods led the January advance, said the Labor Department, adding that a significant factor was gasoline prices. Energy prices also contributed to elevated consumer inflation in January.
“While producer prices are off their peaks, inflation is elevated and the monthly change in prices showed a move in the wrong direction last month,” said Rubeela Farooqi, chief US economist at High Frequency Economics.
“These data will keep the (Federal Reserve) on track to raise interest rates further… in order to get inflation back towards the two percent target,” she said.