U.S. wholesale prices came in hotter than expected last month at a time when progress against inflation appears to have stalled, undercutting expectations for lower interest rates this year.
Economists also watch it because some of its components, notably health care and financial services, flow into the Federal Reserve’s preferred inflation gauge — the personal consumption expenditures, or PCE, index.
The Labor Department reported Thursday that its producer price index — which tracks inflation before it reaches consumers — rose 0.4% from December and 3.5% from January 2024.
Inflation flared up in early 2021 as the economy rebounded with unexpected strength from COVID-19 lockdowns, overwhelming factories, ports and freight yards and leading to shortages, delays and higher prices.
The wholesale price report arrived a day after the Labor Department delivered some bad news about inflation at the consumer level.
