Wholesale prices rose faster than expected in January, contrary to expectations that inflation was easing, the Bureau of Labor Statistics said Friday.
The core producer price index, which excludes volatile food and energy prices, rose a seasonally adjusted 0.8%, beating December’s 0.6% rise and well above the Dow Jones consensus estimate of 0.3%.
On an all-item basis, the overall PPI increased by 0.5%, which also exceeded expectations of 0.3% and increased by 0.1 points from the previous month.
For the full year, core wholesale prices rose 3.6%, while the composite index rose 2.9%. Both numbers are well above the Federal Reserve’s 2% inflation target, suggesting that rising prices remain a factor in the U.S. economy.
Stock market futures widened losses in response to the report.
The increase was mainly driven by service prices, which rose 0.8% month-on-month, marking the highest price since July 2025. In contrast, while core goods prices rose by 0.7%, goods prices actually fell by 0.3%.
More than 20% of the service increase was due to commercial and commercial equipment wholesale gains. On the financial front, energy and food prices both fell, while metal prices rose 4.8%.
Traded services prices rose 2.5%, contributing to upward wholesale inflation pressures.
The report comes as President Donald Trump has repeatedly insisted that inflation is under control. Pipeline pressures indicated by the PPI numbers could cause the Fed to be cautious in considering its next move on interest rates. Although President Trump and other White House officials are pushing for rate cuts, many in the market believe the Fed will remain on the sidelines through the summer.
Economists worry that President Trump’s tariffs will push up inflation, but Fed officials largely expect the impact to be temporary. There was some evidence of tariffs in the PPI data, and indexes for other goods such as apparel and intermediate parts rose.
President Trump lost a key Supreme Court ruling that overturned his move to take emergency measures to impose tariffs. But the president has cited other powers that would allow him to do his job anyway.
