The U.S. Producer Price Index (PPI) surged more than expected in January, highlighting persistent inflationary pressures. It could support further rate hikes in the coming months.
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Excluding the volatile food and energy and trade services PPI rose 0.6% from the previous month. It exceeded market expectations of a 0.2% rise, the biggest rise since March last year. Compared to the same month of the previous year, it increased by 4.5%.
Earlier January’s consumer price index (CPI) also showed that inflationary pressures remained high despite aggressive monetary tightening since last year. PPIs were generally subdued over the past few months as supply chain problems improved, prices for many commodities fell and demand for goods subsided.
U.S. CPI Shows Inflation Remains Strong;
But inflation has turned out to be more entrenched than many expected. Going forward, the strength of the labor market and developments in international commodity prices will be key to the overall picture of inflation.
Goods prices rose 1.2% from the previous month in January, the biggest increase since June last year. There was also a notable rise in some key items in service prices, such as outpatient medical expenses rising 1.4%. Auto retailers, portfolio management and air service prices also rose.
Some categories, such as medical care, are used to calculate personal consumption expenditure (PCE). January PCE will be announced next week on the 24th.
See table for detailed statistics.
Original title:US Producer Prices Exceed Forecast in Biggest Gain Since June(excerpt)
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