January jump for US wholesale inflation


US wholesale inflation resumed its upward trajectory in January, driven higher by rising costs for hospital care, transportation and clothing, the Labor Department reported Thursday.

Coming after a flat December, the upward movement saw one key measure hit a nine-month high and another reach its highest level since records began three years ago.

With Wall Street on a volatile ride this month, markets are especially sensitive to signs of rising price pressures and hints the central bank may hike benchmark interest rates this year more quickly than expected.

The Producer Price Index, which tracks the cost of wholesale goods and services, posted a 0.4 percent rise in January, matching analyst expectations, according to the Labor Department.

Wholesale prices for outpatient care and bus fares rose, as did gasoline, diesel and jet prices along with electricity, iron and steel scrap.

Year-on-year, December’s price changes put the index up 2.7 percent over January of last year — up a tenth of a point from December but still lower than November’s 3.1 percent.

Excluding the volatile food and fuel categories, “core” goods prices rose 0.2 percent for the month, the same as in December.

Year-on-year, this measure rose 2.5 percent, its highest level since officials began tracking it in August of 2014.

The new figures come a day after the Labor Department reported a sudden jump in the more closely watched Consumer Prices Index.

The Federal Reserve is widely expected to raise interest rates next month but investors have grown jittery in recent weeks that policymakers could tighten rates as many as four times this year instead of the expected three.

Ian Shepherdson of Pantheon Macroeconomics said Thursday that health care services had seen their biggest jump in eight years, with a one-percent spike in the cost of outpatient hospital services.

“Prior data showed no sign of upward pressure, so for now we assume this is noise rather than a shift in the trend,” he said in a research note.


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