Wholesale inflation in January surpassed expectations

US Producer Prices Rise More Than Anticipated in January

A factory worker manages steel sieve parts at HCC, a manufacturer in Mendota, Illinois, on February 21, 2025. (Photo: Vincent Alban/Reuters)

New figures released Friday reveal that wholesale prices in the United States climbed more than analysts had forecast in January.

The Producer Price Index (PPI), which tracks changes in prices received by producers and manufacturers, increased by 0.5% last month, up from a 0.4% rise in December, according to the Bureau of Labor Statistics. On a yearly basis, inflation eased slightly to 2.9%, down from 3% the previous month.

Although gas and food costs dropped during January, these declines were offset by a significant jump in “trade services”—a category that reflects profit margins for wholesalers and retailers.

Because trade services can fluctuate greatly from month to month, economists have been monitoring this area closely over the past year. It may indicate whether businesses are passing on higher import costs, such as those from tariffs, to customers.

In January, trade services surged by 2.5%, suggesting that increased costs could be transferred to other businesses and consumers.

Experts had predicted wholesale inflation would rise by 0.3%, which would have resulted in a 2.6% annual rate.

Excluding the often-volatile food and energy sectors, the core PPI—which highlights underlying inflation trends—rose sharply. Core prices jumped 0.8% in January, compared to a 0.6% increase in December, pushing the annual rate to 3.6%, the highest level in ten months.

This article will be updated as more information becomes available.