A wholesale price gauge increased more than scheduled in January, although certain details of the report indicated that pressures on inflation of pipelines are ensuring.
THE Producer price indexWho measures what producers get for their goods and services, increased by 0.4% seasonally adjusted over the month, compared to the estimate of Dow Jones for 0.3%, the Bureau of Labor reported Thursday Statistics.
Excluding food and energy, the basic PPI was up 0.3%, in accordance with forecasts.
The term contracts on the stock market increased more following the press release while the treasury yields were significantly lower, despite the higher title number than expected. Wall Street’s strategists have cited the details of the report suggesting a slightly more benign inflation image.
In particular, certain costs related to health care has shown softening – doctors’ care, for example, fell 0.5%. In addition, interior plane tickets decreased by 0.3% and the prices of the brokerage services were reduced by 2.2%.
In the past year, the PPI of all the elements increased by 3.5%, well ahead of the target of the Central Bank. Understanding prices indicate that the market now does not expect the Fed again to lower its benchmark interest rate before October.
Although the producer versions and the consumer price index are largely cited, these are not the main ones that the Fed uses. The central bank focuses rather on the price of personal consumer expenditure, which the Commerce Department will later publish in February. The PPI and CPI versions fuel this measure.
The president of the Fed, Jerome Powell, noted on Wednesday the greatest concentration of the Fed on the measurement of the PCE, while telling the committee of financial services of the Chamber that “we are not yet completely there” on the ‘Inflation, although he has cited “great progress” made so far.
By gathering the data, the basic PCE measurement will probably show an increase of 0.22%, against 0.45% in December, according to Citigroup estimates. This would push the annual inflation rate to 2.5%, said the firm.
The PPI version occurs the day after the day when the BLS said that the consumer price index increased by 0.5% over the month, placing the annual inflation rate to 3% and well out of reach of the ‘long -term objective of the Fed at 2%.
Together, the reports postpone the expectations of a drop in rate to the second semester, although inflation data can be volatile and the prospects could change depending on the following months.
“Bry price growth has been slightly higher than scheduled for January, and the reading of December was adjusted upwards,” said Elizabeth Renter, principal economist on the Nerdwallet personal financing site. “In other words, inflation at the producer remains high, and a concern is that this inflation could ultimately be transmitted to consumers.”
The revisions of the December figures also complicated the image of inflation, the gain now put at 0.5%, compared to the increase of 0.2% previously reported.
In January, the prices of producers of services increased by 0.3% while the goods increased by 0.6%. The prices of the services were led by a jump of 5.7% in the category of travelers’ accommodation services, which, according to the BLS, represented more than a third of the gain.
On the goods side, an increase of 10.4% of diesel fuel costs was an important factor. PPI data also reflected the massive leap in egg prices while farmers destroy millions of chickens to prevent the spread of avian flu. Eggs for fresh use exploded 44% over the month and increased 186.4% compared to a year ago.
In other economic news on Thursday, the Labor Department said that Initial deposit of unemployment complaints Littlely changed for the week ended on February 8. The complaints totaled 213,000, a drop of 7,000 compared to the previous period and close to the estimate of 215,000. Continuous complaints, which took place a week, fell to 1.85 million, down 36 000.
