Major Spike Seen in Key Inflation Metric

According to fresh data, Thursday’s new data shows that the Producer Price Index (PPI), which measures inflation upstream of consumers, saw its headline and core numbers make their greatest gains since June and March 2022 respectively.

According to the Bureau of Labor Statistics in January, headline PPI inflation rose 0.7 percent, bringing the annual increase to 6.0 percent. 

In January, PPI for final consumption rose 0.7%. Goods rise 1.2%, while services rise 0.4% https://t.co/dyytPa492i #PPI #BLSdata

— BLS-Labor Statistics (@BLS_gov) February 16, 2023

According to estimates, headline PPI would rise by 0.4% per month. However, Thursday’s release showed that the PPI rose more than expected and was the highest since last June’s increase of 0.9 percent. 

Largest month-on-month growth since June #PPI

⁦@CNBC pic.twitter.com/ASDMJNUYqk

— Carl Quintanilla (@carlquintanilla) February 16, 2023

Notably, January’s headline PPI rise was greater than any other. “progress” The President Joe Biden might have referred to the lowering of costs last year, when PPI saw decreases in December 2022 by -0.2% and -0.3% respectively. 

Core PPI inflation — which excludes food, energy, and trade services — jumped 0.6 percent in January, that data point’s largest increase since it advanced 0.9 percent in March of 2022. 

Thursday’s data shows Americans hope that the persistently high price of food will decrease in a discernible way. PPI was released alongside the Consumer Price Index (CPI), earlier this week. Both showed higher inflation than expected.

It raises concerns that the Federal Reserve might continue raising interest rates through 2023. This is evident in Wall Street’s reaction to Thursday’s PPI data.