{"id":1155,"date":"2023-02-17T09:48:16","date_gmt":"2023-02-17T14:48:16","guid":{"rendered":"https:\/\/embarrdowns.com\/producer-price-index-increases-0-7-in-january-signaling-inflationary-pressures\/"},"modified":"2023-02-17T09:48:16","modified_gmt":"2023-02-17T14:48:16","slug":"producer-price-index-increases-0-7-in-january-signaling-inflationary-pressures","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/producer-price-index-increases-0-7-in-january-signaling-inflationary-pressures\/","title":{"rendered":"Producer Price Index Increases 0.7% in January, Signaling Inflationary Pressures"},"content":{"rendered":"

On Thursday, the U.S. Bureau of Labor Statistics reported that the Producer Price Index for final demand increased 0.7% in January, seasonally adjusted.[0]<\/a><\/sup> This was higher than the 0.4% rise expected by economists surveyed by Dow Jones. The index for final demand less foods, energy, and trade services rose 0.6%, the largest advance since March 2022.[1]<\/a><\/sup><\/p>\n

Market participants keep a close eye on the Producer Price Index (PPI) as a gauge of wholesale inflation.[2]<\/a><\/sup> Producers usually charging more to consumers is seen as a key indicator, because of this.[2]<\/a><\/sup> The PPI announcement is of great importance to the Federal Reserve as they ponder the amount of rate hikes they will have to implement before ceasing.[2]<\/a><\/sup> <\/p>\n

According to a Bloomberg survey of economists, the median estimates predicted a 0.4% rise in the index from the preceding month and a 5.4% increase from January 2022.[0]<\/a><\/sup> Following the report, the S&P 500 dropped and Treasury yields increased.[3]<\/a><\/sup> Core prices, not taking food and energy into account, increased by 5.4%, which was higher than the predicted 4.9%, but lower than the 5.5% of the preceding report.[4]<\/a><\/sup><\/p>\n

One of the major factors behind the rise in the PPI was a 1.2-percent rise in prices for final demand goods. The cost of services for ultimate consumption rose as well, with a 0.4 percent increase.[5]<\/a><\/sup> The index for final demand services less trade, transportation, and warehousing increased 0.6%, while hospital outpatient care prices rose 1.4%.[6]<\/a><\/sup> <\/p>\n

Overall, the increase in producer prices is indicative of persistent inflationary pressures that could push the Federal Reserve to pursue further interest-rate increases in the months ahead.[3]<\/a><\/sup> The Fed currently holds its benchmark federal-funds rate in a range between 4.5% and 4.75%, the highest level since 2007. Analysts expect the Fed to increase interest rates a few more times this year, with the final rate ending around a range of 5.25%-5.55%. <\/p>\n

The January inflation increase has been attributed by economists largely to seasonal factors, as well as compensation for previous months that had lower price increases.[7]<\/a><\/sup> The unusually mild winter could have been a factor, and fuel prices, which are unpredictable, also rose during the month.[7]<\/a><\/sup><\/p>\n

0. <\/span>“Higher Gasoline Prices Drive U.S. Producer Price Index Higher” OilPrice.com, 16 Feb. 2023, https:\/\/oilprice.com\/Latest-Energy-News\/World-News\/Higher-Gasoline-Prices-Drive-US-Producer-Price-Index-Higher.html<\/a><\/a><\/p>\n

1. <\/span>“Producer price index reacclerates in January” Seeking Alpha, 16 Feb. 2023, https:\/\/seekingalpha.com\/news\/3937158-producer-price-index-reacclerates-in-january<\/a><\/a><\/p>\n

2. <\/span>“Crypto Market Tumbles After U.S. PPI Data Comes At 6%” CoinGape, 16 Feb. 2023, https:\/\/coingape.com\/crypto-market-tumbles-after-u-s-ppi-data-rises-0-7-in-january\/<\/a><\/a><\/p>\n

3. <\/span>“U.S. producer prices exceed forecast in biggest gain since June” The Spokesman Review, 16 Feb. 2023, https:\/\/www.spokesman.com\/stories\/2023\/feb\/16\/us-producer-prices-exceed-forecast-in-biggest-gain<\/a><\/a><\/p>\n

4. <\/span>“U.S. Producer Prices Climb 0.7% In January, More Than Expected” RTTNews, 16 Feb. 2023, https:\/\/www.rttnews.com\/3344710\/u-s-producer-prices-climb-0-7-in-january-more-than-expected.aspx<\/a><\/a><\/p>\n

5. <\/span>“Producer Prices Rose 0.7% in January” Floor Focus, 16 Feb. 2023, https:\/\/www.floordaily.net\/flooring-news\/producer-prices-rose-07-in-january<\/a><\/a><\/p>\n

6. <\/span>“Producer Prices Rose in January, Signaling Continued Inflation” The Epoch Times, 16 Feb. 2023, https:\/\/www.theepochtimes.com\/product-price-hikes-signal-continued-inflation_5063616.html<\/a><\/a><\/p>\n

7. <\/span>“Wholesale prices rose 0.7% in January, more than expected, fueling inflation increase” CNBC, 16 Feb. 2023, https:\/\/www.cnbc.com\/2023\/02\/16\/producer-price-index-january-2023-.html<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

On Thursday, the U.S. Bureau of Labor Statistics reported that the Producer Price Index for final demand increased 0.7% in January, seasonally adjusted.[0]<\/a><\/sup> This was higher than the 0.4% rise expected by economists surveyed by Dow Jones. The index for final demand less foods, energy, and trade services rose 0.6%, the largest advance since March 2022.[1]<\/a><\/sup><\/p>\n

Market participants keep a close eye on the Producer Price Index (PPI) as a gauge of wholesale inflation.[2]<\/a><\/sup> Producers usually charging more to consumers is seen as a key indicator, because of this.[2]<\/a><\/sup> The PPI announcement is of great importance to the Federal Reserve as they ponder the amount of rate hikes they will have to implement before ceasing.[2]<\/a><\/sup> <\/p>\n

According to a Bloomberg survey of economists, the median estimates predicted a 0.4% rise in the index from the preceding month and a 5.4% increase from January 2022.[0]<\/a><\/sup> Following the report, the S&P 500 dropped and Treasury yields increased.[3]<\/a><\/sup> Core prices, not taking food and energy into account, increased by 5.4%, which was higher than the predicted 4.9%, but lower than the 5.5% of the preceding report.[4]<\/a><\/sup><\/p>\n

One of the major factors behind the rise in the PPI was a 1.2-percent rise in prices for final demand goods. The cost of services for ultimate consumption rose as well, with a 0.4 percent increase.[5]<\/a><\/sup> The index for final demand services less trade, transportation, and warehousing increased 0.6%, while hospital outpatient care prices rose 1.4%.[6]<\/a><\/sup> <\/p>\n

Overall, the increase in producer prices is indicative of persistent inflationary pressures that could push the Federal Reserve to pursue further interest-rate increases in the months ahead.[3]<\/a><\/sup> The Fed currently holds its benchmark federal-funds rate in a range between 4.5% and 4.75%, the highest level since 2007. Analysts expect the Fed to increase interest rates a few more times this year, with the final rate ending around a range of 5.25%-5.55%. <\/p>\n

The January inflation increase has been attributed by economists largely to seasonal factors, as well as compensation for previous months that had lower price increases.[7]<\/a><\/sup> The unusually mild winter could have been a factor, and fuel prices, which are unpredictable, also rose during the month.[7]<\/a><\/sup><\/p>\n

0. <\/span>“Higher Gasoline Prices Drive U.S. Producer Price Index Higher” OilPrice.com, 16 Feb. 2023, https:\/\/oilprice.com\/Latest-Energy-News\/World-News\/Higher-Gasoline-Prices-Drive-US-Producer-Price-Index-Higher.html<\/a><\/a><\/p>\n

1. <\/span>“Producer price index reacclerates in January” Seeking Alpha, 16 Feb. 2023, https:\/\/seekingalpha.com\/news\/3937158-producer-price-index-reacclerates-in-january<\/a><\/a><\/p>\n

2. <\/span>“Crypto Market Tumbles After U.S. PPI Data Comes At 6%” CoinGape, 16 Feb. 2023, https:\/\/coingape.com\/crypto-market-tumbles-after-u-s-ppi-data-rises-0-7-in-january\/<\/a><\/a><\/p>\n

3. <\/span>“U.S. producer prices exceed forecast in biggest gain since June” The Spokesman Review, 16 Feb. 2023, https:\/\/www.spokesman.com\/stories\/2023\/feb\/16\/us-producer-prices-exceed-forecast-in-biggest-gain<\/a><\/a><\/p>\n

4. <\/span>“U.S. Producer Prices Climb 0.7% In January, More Than Expected” RTTNews, 16 Feb. 2023, https:\/\/www.rttnews.com\/3344710\/u-s-producer-prices-climb-0-7-in-january-more-than-expected.aspx<\/a><\/a><\/p>\n

5. <\/span>“Producer Prices Rose 0.7% in January” Floor Focus, 16 Feb. 2023, https:\/\/www.floordaily.net\/flooring-news\/producer-prices-rose-07-in-january<\/a><\/a><\/p>\n

6. <\/span>“Producer Prices Rose in January, Signaling Continued Inflation” The Epoch Times, 16 Feb. 2023, https:\/\/www.theepochtimes.com\/product-price-hikes-signal-continued-inflation_5063616.html<\/a><\/a><\/p>\n

7. <\/span>“Wholesale prices rose 0.7% in January, more than expected, fueling inflation increase” CNBC, 16 Feb. 2023, https:\/\/www.cnbc.com\/2023\/02\/16\/producer-price-index-january-2023-.html<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":1154,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/1155"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=1155"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/1155\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/1154"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=1155"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=1155"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=1155"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}