US Producer Price Index Rebounds in January, Signaling Persistent Inflation
Washington, DC, February 16, 2023- The Producer Price Index for final demand increased 0.7% in January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported. Prices for final demand goods led the advance in the final demand index, increasing 1.2%, while prices for final demand services also moved higher, increasing 0.4%.
The report also said prices for services rose by 0.4% for the second straight month, reflecting 0.2% upticks in prices for trade and transportation and warehousing services and a 0.6% increase in prices for other services. Final demand services prices meanwhile increased again by 0.4% on the month, driven by a 0.8% rise in those for trade, which include retailers’ margins.
The producer input prices increased by 14.1% from January 2022 to January 2023, a decrease from the 16.2% increase seen in the 12 months prior. The producer output (factory gate) prices increased by 13.5% over the span of 12 months until January 2023, a decrease from the 14.6% growth seen in the year to December 2022. Crude oil and petroleum product inputs were the primary factors driving the decrease in the annual rates of both input and output inflation. In January 2023, producer input prices went down 0.1% each month, while output prices rose by 0.5%.
In January, the index for final demand excluding foods, energy, and trade services rose by 0.6%, the greatest increase since March 2022. The annual Core PPI edged lower to 5.4% in the same period from 5.5%, compared to analysts’ estimate of 4.9%. The Core Producer Price Index was 0.5% on a monthly basis.
In addition to the Producer Price Index, the U.S. Department of Labor released a separate report on Tuesday showing U.S. consumer prices increased in line with economist estimates in the month of January. The consumer price index rose by 0.5 percent in January, following a revised 0.
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