Core producer prices in the U.S. jumped in the first month of the year to reach the highest rate of inflation in over two years, signaling that inflationary pressures could be building, according to The Wall Street Journal. On Wednesday, the Labor Department reported that the producer price index jumped by a seasonally adjusted 0.8% in January from the previous month, and surging energy prices were largely responsible for the gain. Core producer price inflation was 0.5%, which was more than double the forecast from economists and marked the highest rate since October 2008.
The surge in core prices has some economists like Miller Tabak’s Dan Greenhaus concerned over mounting “evidence of an inflationary rebound,” although the core index was only up 1.6% year-over-year, which is within the Federal Reserve’s target range. According to Bloomberg, the Fed reported separately that industrial production slowed by 0.1% in January from the month before after rising 1.2% previously. The data defied expectations for a modest rise, but MF Global economist Jim O’Sullivan said, “The trend in manufacturing is stronger than today’s numbers suggest,” pointing to harsh weather that “held back” output.
Click here to read the story on producer prices from The Wall Street Journal.
Click here for coverage of industrial production from Bloomberg News.