Former Assistant Secretary of the Treasury Monica Crowley talks about the strain inflation is having on the middle and lower classes on “The Bottom Line.”
Wholesale-level inflation was much higher than expected in January, highlighting the challenge of containing price pressures within the economy.
The Labor Department announced Friday that it will measure the producer price index. Inflation at the wholesale level In January, until it reached consumers, it rose 0.3% from the previous month. On an annual basis, prices still rose by 0.9%.
These numbers beat both the 0.1% monthly and 0.6% annual increase forecast by Refinitiv economists.
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In another sign of the persistence of high inflation, core prices, which exclude the more volatile indicators of food and energy, rose 0.5% in the month. This is higher than both the 0.1% expected and the flat reading recorded last month.
On a 12-month basis, it increased by 2%.
The data was released three days after the Labor Department said it was monitoring the situation more closely. consumer price indexThe index, which measures prices paid directly by consumers, rose 0.3% in January from the previous month and 3.1% from the same period last year, far more than economists expected.
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A customer buys meat at a Safeway store in San Rafael, California, on April 12, 2023. ((Photo by Justin Sullivan/Getty Images)/Getty Images)
Both announcements are considered important indicators of inflation, and PPI is considered a leading indicator of inflationary pressures as costs are passed on to consumers. Various indicators show that inflation remains above the Federal Reserve's recommended 2% target.
As policymakers try to decide the next course of interest rates in 2024, the Fed signaled it is closely monitoring evidence that inflation continues to subside.
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Central bank officials opened the door to rate cuts this year, but they have bounced back against positive market expectations. Chairman Jerome Powell He said at a recent Fed meeting that a rate cut in March would likely be taken off the table because policymakers didn't have enough confidence that inflation was on track to return to 2%. Ta.
“This morning's PPI report only further muddies the picture,” said Chris Zaccarelli, chief investment officer at Independent Advisors. Because it shows what needs to be done.” Alliance.
