Wholesale inflation surges 0.7% in January, more than expected as high prices persist

Producer price index projected to increase 0.4% in January

Inflation at the wholesale level rose more than expected in January, the latest sign that painfully high consumer prices could take some time to dissipate.

The Labor Department said Thursday that its producer price index, which measures inflation at the wholesale level before it reaches consumers, rose 0.7% in January from the previous month. It marked the steepest monthly increase since early summer. On an annual basis, prices are up 6%.

Those figures were both higher than the 5.4% headline figure and 0.4% monthly increase forecast by Refinitiv economists, a worrisome sign for the Federal Reserve as it seeks to cool price gains and tame consumer demand with the most aggressive interest rate hike campaign since the 1980s.

Excluding the more volatile measurements of food and energy, core inflation rose 0.5% for the month — the highest increase since May 2022 and nearly double the Wall Street estimate.

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