Wholesale Inflation Soars On Rising Energy Costs
Inflation at the wholesale level jumped 1 percent in January on rising energy costs and posted the biggest 12-month gain in more than 26 years, a government report showed on Tuesday.
Core producer prices, which strip out volatile energy and food costs, climbed a greater-than-forecast 0.4 percent, the sharpest increase since February, the Labor Department said.
Analysts polled by Reuters were expecting prices paid at the farm and factory gate to rise 0.4 percent overall and 0.2 percent when food and energy were excluded.
Producer prices were up 7.4 percent from January of last year, the steepest climb since October 1981, the Labor Department said.
The dollar gained against the euro and New York gold futures narrowed losses on the larger-than-expected price rises, which could make it harder for the Federal Reserve to cut benchmark interest rates to prop up the underperforming U.S. economy.
U.S. fed funds rate futures fell after the report, as did stock futures.
In the report, the Labor Department said energy prices rose 1.5 percent in January and were up 22.6 percent over 12 months.
Gasoline prices gained 2.9 percent in the month and soared 48.1 percent over the year.
Reflecting higher commodities prices, finished consumer foods rose 1.7 percent in January, the steepest gain since a matching increase in October 2004.