U.S. January PPI Rises 0.5% M/M, Beats Estimates; Core PPI Hits 3.4% Y/Y

The U.S. Producer Price Index rose 0.5% month over month in January, exceeding the 0.3% market expectation and the 0.4% gain in December, U.S. Bureau of Labor Statistics data show. Headline PPI advanced 2.9% year over year versus an expected 2.6%, while core PPI—excluding food, energy, and trade services—increased 0.3% m/m in line with forecasts and accelerated to 3.4% y/y, surpassing the 3% consensus. Energy prices declined, with wholesale gasoline down 5.5% m/m and 15.7% y/y, while rising wholesale service prices and wider profit margins among retailers and wholesalers drove the increase. Market participants said the stronger-than-expected PPI has reinforced inflation concerns, with healthcare and financial services components potentially feeding into the PCE price index monitored by the Fed; international spot gold pulled back from a high after the release before recovering part of the losses.