The Producer Price Index (PPI) for January jumped by +.4%, exceeding the forecasted +.3%. This unexpected rise highlights ongoing inflation pressures, which could have significant effects on both consumers and businesses.
The PPI gauges the average change over time in the selling prices received by domestic producers for their output. When the PPI is higher than expected, it suggests that producers are facing increased costs, which might eventually trickle down to consumers, resulting in higher prices for everyday goods and services. This news is especially crucial as the Federal Reserve keeps a close eye on inflation trends to guide its monetary policies.
Key Components of the January PPI:
- Final Demand Goods: The prices for final demand goods saw an increase of +.6% in January, encompassing items like food, energy, and other consumer goods.
- Final Demand Services: The index for final demand services increased by +.3% in January, covering areas like healthcare, transportation, and various business services.
- Core PPI: Excluding food and energy, the core PPI rose by +.3% month-over-month, providing a clearer picture of underlying inflation trends.
Year-over-Year Comparison:
- The year-over-year PPI growth rate for January stood at 3.5%, up from 3.3% in December.
- The annual core PPI rose to 3.4% in January from 3.3% in December.
BREAKING: January PPI inflation unexpectedly RISES to 3.5%, above expectations of 3.2%.
Core PPI inflation was 3.6%, ABOVE expectations of 3.3%.
PPI inflation is now at its highest since February 2023 while CPI jumped +0.5% month-over-month.
The "Fed pivot" is over. pic.twitter.com/cRk1DhKbFH
— The Kobeissi Letter (@KobeissiLetter) February 13, 2025
PPI FINAL DEMAND ABSURDLY HOT!: The index for final demand goods moved up 0.6 percent in January, the fourth consecutive rise. Over half of the broad-based January advance can be traced to a 1.7-percent increase in prices for final demand energy. The indexes for final demand…
— Sold At The Top (@soldatthetop) February 13, 2025
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