U.S. wholesale prices rose 0.4% in January, exceeding expectations and suggesting inflation progress has stalled, reported the Associated Press. The producer price index increased 3.5% year-over-year, matching December’s pace but surpassing forecasts of 3.2%. Core prices, which exclude food and energy, climbed 0.3% from December and 3.6% annually.
Concerns are growing that President Trump’s policies, including increased tariffs and mass deportation plans, could drive inflation higher. On Thursday, Trump announced plans to raise U.S. tariffs to match those imposed by other countries, potentially adding to price pressures.
Rising wholesale costs were driven by a 10.4% surge in diesel fuel prices, a 1.1% jump in food costs, and a 44% spike in egg prices due to bird flu. Hotel costs also pushed service prices up 0.3%, while overall goods prices increased 0.6%.
The report follows the Labor Department’s consumer price index data, which showed a 3% annual increase in January, up from 2.9% in December. This suggests inflation may be more persistent than previously expected, complicating hopes for Federal Reserve rate cuts.
Economists closely monitor wholesale prices as they often foreshadow consumer inflation trends. Certain components, such as health care and financial services, also feed into the Fed’s preferred inflation gauge, the personal consumption expenditures (PCE) index, adding further weight to inflation concerns.
