The Labor Department said over 80 percent of the January increase can be traced to margins for final demand trade services, which advanced by 0.9 percent.
US producer prices rose more than expected in January, recording their largest gain in four years amid increases in the cost of energy products and some services, but a strong dollar continued to keep underlying inflation tame. The Fed targets inflation at 2 percent a year, enough to keep prices relatively stable while encouraging economic activity.
Rising energy costs have recently become a prime source of inflation, reversing a trend in recent years in which falling oil prices were suppressing inflation.
Washington, DC, February 14, 2017- The Producer Price Index for final demand increased 0.6% in January, seasonally adjusted, the U.S. Bureau of Labor Statistics has reported.
The March U.S. Dollar Index is trading at 100.86, down 0.08.
Last month, prices for final demand goods increased 1.0 percent, the largest rise since May 2015. Higher prices for pork, eggs and milk were offset by lower costs for vegetables, fresh fruits and beef, among other items. Compared with a year earlier, this core measure increased 1.6 percent after a 1.7 percent gain.
Excluding food and energy, wholesale prices rose 0.4 percent from the previous month after a 0.1 percent rise.
The volatile trade services component, which measures changes in margins received by wholesalers and retailers, shot up 0.9% in January after being unchanged in the prior month.
On Wednesday, the Labor Department is scheduled to release its more closely watched monthly report on consumer price inflation.