US January Producer Prices Rise 0.6%, Jump in Gasoline Prices
- Author: Larry Hoffman Feb 14, 2017,
Feb 14, 2017, 22:35
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.
The Shanghai Composite Index edged up 0.03 percent to 3,217.93 points.
Wholesale prices of goods increased 1 percent in January, the most since May 2015.
Moreover, the department said, wholesale food prices were unchanged after climbing 0.5% in December.
Projections for the producer-price index ranged from an advance of 0.2 percent to 0.5 percent, according to the Bloomberg survey.
Compared to the same month a year ago, producer prices were up by 1.6 percent in January, unchanged from December. Half of that pickup was due to a 12.9 percent surge in gasoline.
Higher raw materials costs are pushing up inflation across the globe.
The Bureau of Labor Statistics reported that core producer prices (PPI) rose 1.2 percent year over year in January versus a rise of 1.6 percent in December. In China, producer prices climbed in January by the most since 2011. Transportation and warehousing services prices climbed 1.1 percent.
Prices for final demand less foods, energy, and trade services rose 0.2% in January after inching up 0.1% in December. The index for final demand services moved up 0.3%.
Economists had forecast the PPI rising 0.3% last month and the year-on-year increase moderating to 1.5%.
The data also suggests that the strong dollar has not had a major impact in curbing import prices at this stage.