U.S. wholesale prices came in hotter than expected last month with progress against inflation appearing to have stalled, further undercutting expectations for lower interest rates this year.
Economists and financial markets fear President Donald Trump’s policies will push inflation higher yet. His tariffs on foreign goods and plans to deport millions of undocumented workers could translate into higher prices and on Thursday, Trump said that he’ll sign an order that increases U.S. tariffs to the rates other countries charge on imports.
The Labor Department reported Thursday that its producer price index—which tracks inflation before it reaches consumers—rose 0.4% from December and 3.5% from January 2024. The monthly increase was down from an upwardly revised 0.5% in December, and the year-over-year uptick matched December’s. But forecasters had expected a 0.2% change month over month and 3.2% year over year.
Excluding volatile food and energy prices, so-called core producer prices rose 0.3% last month from December and 3.6% from a year earlier.
Wholesale services prices rose 0.3%, pushed higher by increasing hotel costs. Goods services climbed 0.6% on higher energy prices, including a 10.4% rise in the price of diesel fuel. Wholesale food prices jumped 1.1% in January as the cost of eggs rocketed up 44%, reflecting the impact of bird flu.
