US Producer Prices came in hotter than expected in January, with the headline PPI rising 0.5% MoM (vs +0.3% exp), higher than the revised +0.4% MoM in December. This left Producer Prices up 2.9% YoY (hotter than expected but below December’s +3.0%)…
Source: Bloomberg
Under the hood, we see a surge in Services costs (not tariff related) dominated the rise in PPI (while Energy saw deflation)
Core PPI (ex food and energy) surged 0.8% MoM and is up 3.6% YoY (both hotter than expected) – the fast pace of price increase since March 2025…
Source: Bloomberg
The bottom line is that this will likely lead to a hotter than expected Core PCE print – something The Fed watches closely.
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