Lucia Motikani
WASHINGTON (Reuters) -The prices of producers in the United States increased in January, as it provided more evidence that inflation was increasing again and strengthening the financial market views that the Federal Reserve would not reduce interest rates before the second half of the year.
The widespread rise in the productive inflation that the Ministry of Labor informed on Thursday followed the news on Wednesday that consumer prices accelerated in more than 1-1/2 years in January. However, some details of the report indicated a more moderate increase in January in the main inflation measures followed by the US Central Bank for a target of 2 %, which was expected in the wake of the strong consumer price index data.
Economists have warned that inflation was directed to the top, as President Donald Trump presses a wide tariff on imports as well as mass deportations that could cause a shortage of employment, increase wages and goods.
“The report gives a temporary stoppage to evaluate expectations, however, it is possible that the high costs of work will be translated into escalating pressure on consumer prices in the coming months,” said Court Rankin, chief economist at PNC Financial, said. “The definitions are still threatened by the Trump administration, which would raise the costs of companies in all fields.”
The Ministry of Labor Statistics Office (BLS) said that the product price index for the final demand increased by 0.4 % last month after an increase of 0.5 % in December. The economists of Reuters expected that the producers' price index would rise by 0.3 %.
In 12 months to January, the producers' price index advanced 3.5 % after increasing the same margin in December. With the PPI report in January, the BLS updated weights to reflect price movements in 2024, and the seasonal modification factors, the model used by the government to reduce seasonal fluctuations from data.
The rise in the product price index was through goods and services. Wholesale commodity prices jumped by 0.6 % after an increase of 0.5 % in December. More than half of the increase of 1.7 % jump came in energy commodity prices. Food prices increased by 1.1 %, with egg prices increased by 44.0 %, amid bird flu. With the exception of food and energy, the price of goods increased by 0.1 % for the second month in a row.
Services increased by 0.3 % after an increase of 0.5 % in December. An increase of 5.7 % in wholesale prices in hotel and motor rooms was more than a third of the increase in services.
There were also retail price increases, retail shipping, food, alcohol, jewelry, jewelry, shoes, retail accessories, and collected wired communications.
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