There's more downbeat news on inflation this morning: Wholesale costs rose sharply in January, the latest indication of more persistent price pressures across the economy.
- The producer price index, a measure of the change in costs of suppliers' goods and services, had been fairly benign in recent months, as supply chains healed and commodity costs came down. That changed last month.
Why it matters: The index is considered a leading indicator of what might happen to costs for consumers, as businesses pass along higher costs to shoppers.
Details: The PPI rose 0.7% in January — the largest monthly jump since last summer, and a slightly quicker pace than analysts anticipated. The index is up 6% in the 12 months through January, compared to 6.5% in December.
- Stripping out energy, food and trade service costs, the index rose 0.6%, compared to the 0.2% in December, the biggest monthly rise since last March.
The bottom line: The Fed "is hoping for supply chains to clear up and for finished goods prices to slow sharply—there is no sign of this in today's report," Brean Economics' John Ryding and Conrad DeQuadros wrote in a note.