Hot PPI in January 2023

Inflation at the wholesale level, measured by the Producer Price Index (PPI), rose more than expected in January 2023. 

The U.S. Labor Department reported that its producer price index, which measures inflation at the wholesale level before it reaches consumers, came in hotter than expected and rose 0.7% in January from the previous month. On an annual basis, prices are up 6%. In short, PPI is reflects intrinsically the prices consumers will be paying for goods and services in the near future.

Those figures were both higher than the 5.4% headline figure and 0.4% monthly increase in forecast by Refinitiv economists, a worrisome sign for the hawkish Federal Reserve as it seeks to cool inflationary price gains and tame consumer demand with the most aggressive interest rate hike campaign since the 1980s.

Excluding food and energy, core inflation increased 0.1% for the month – matching the estimate from economists.

Stubborn inflation has caused more Americans to live paycheck to paycheck despite 5.1% increase in wages, reports Fox Business. Increased wages are not keeping pace with soaring prices of consumer goods and services, prompting many Americans to live paycheck to paycheck.


References:

  1. https://www.foxbusiness.com/economy/wholesale-inflation-surges-january-more-expected-high-prices-persist
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