This week, both the U.S. consumer price index (CPI) and the producer price index (PPI) exceeded expectations.
The CPI increased for a fourth straight month in January amid a rise in food and energy costs. Consumer prices overall increased 3% from a year earlier, up from 2.9% the previous month. On a monthly basis, costs jumped 0.5% – the most since August 2023 – up from 0.4% in December. Prices of eggs and used cars were among the largest price drivers for the month..
On the wholesale side, U.S. producer prices also steadily increased in January. The PPI for final demand rose 0.4% last month after an upwardly revised 0.5% gain in December. Excluding food and energy, the core PPI was up 0.3%, in line with forecasts. In the 12 months through January, the PPI advanced 3.5% after increasing by the same margin in December. The rise in the PPI was across goods and services.
Wholesale goods prices jumped 0.6% after rising 0.5% in December. More than half of the increase came from a 1.7% jump in energy goods prices. Food prices shot up 1.1%, with egg prices soaring 44.0% amid an avian flu outbreak. Excluding food and energy, goods prices edged up 0.1% for a second straight month.
Together, the reports are pushing back expectations for a rate cut until the second half.
