PPI Rises 0.7% in January, Jobless Claims Fall Unexpectedly
Data released on Thursday showed that the Producer Price Index (PPI), a measure of what raw goods fetch on the open market, rose 0.7% in January, the largest increase since June 2022. This was higher than the 0.4% increase that economists surveyed by Dow Jones had been expecting after a decline of 0.2% in December.
The annual rate of PPI growth stood at 6%, down from December’s revised 6.5% and the lowest since March 2021. Excluding prices for food, energy and trade services, producer prices climbed by 0.6% in January after edging up by 0.2% in December. This was the biggest jump since March of last year.
When excluding food and energy, the Producer Price Index (PPI) increased 5.4% on a yearly basis and 0.5% on a monthly basis The index for final demand less food, energy and trade services was up 0.6%, the largest monthly rise since March 2022, and also above economists' forecasts. The rate increased by 4.5% annually.
The index for final demand goods rose by 1.2% in January, the largest increase since rising 2.1% in June 2022. A 5.0% increase in the cost of final demand was the primary factor in the January progress. The index for final demand services also moved higher, increasing 0.4%.
The report indicated that prices of services had risen by 0.4 percent for two consecutive months, with prices of trade and transport, as well as warehousing services, going up by 0.2 percent and prices of other services increasing by 0.6 percent.
Excluding food, energy and supplier margins, the core price index rose 0.6% in January following a revised 0.2% increase in December. Core PPI increased 4.5% over the course of twelve months, a decrease from the 4.7% increase recorded in December.
This week, the Labor Department issued a report indicating that consumer prices rose 6.4% in January compared to the same time period a year prior, which is a slight decrease from the 6.5% recorded in December. This marks the seventh consecutive month of slowing inflation.
Unexpectedly, the amount of Americans filing for initial unemployment claims decreased to 194K, which was lower than the expected 200K.
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1. “US Producer Prices Exceed Forecast in Biggest Gain Since June” Forex Factory, 16 Feb. 2023, https://www.forexfactory.com/news/1206072-us-producer-prices-exceed-forecast-in-biggest-gain
2. “U.S. Producer Prices Climb 0.7% In January, More Than Expected” RTTNews, 16 Feb. 2023, https://www.rttnews.com/3344710/u-s-producer-prices-climb-0-7-in-january-more-than-expected.aspx
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6. “Producer Prices Rose, Pointing to Persistent Inflation” MarketWatch, 16 Feb. 2023, https://www.marketwatch.com/story/producer-prices-rose-pointing-to-persistent-inflation-4dda60ef
7. “Strong Data Sinks Stocks” Action Forex, 16 Feb. 2023, https://www.actionforex.com/contributors/fundamental-analysis/486763-strong-data-sinks-stocks
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