An index of wholesale prices rose 9.7% compared to a year ago, remaining near all-time high levels since 2010 when the government started collecting the data.
Why it matters: The Producer Price Index (PPI) is a key leading indicator for the prices that consumers eventually see. These wholesale prices that companies pay for goods are often passed on to customers in the form of retail price increases.
- As of January 2021, the PPI showed 12-month price growth of 1.6% — and moved up steadily throughout last year.
By the numbers: Prices moved up 1% in January 2022 alone, double the 0.5% that economists had expected, according to FactSet. That followed increases of 0.4% and 0.9% during the prior two months, respectively.
- The 9.7% year-over-year growth compares to expectations for 9.1%.
"The combination of stubborn supply disruptions and elevated energy prices will prevent producer prices from reverting to more normal patterns until later this year," Mahir Rasheed of Oxford Economics wrote in a research note this morning.
The bottom line: As long as wholesale prices continue to rise, there's no clear end in sight for this current bout of inflation.