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US January Wholesale Prices Jump

FILE: A sign displays the price for shirts at a Costco warehouse in this photograph taken Thursday, June 17, 2021, in Lone Tree, Colo. When wholesale prices rise, retailers raise theirs, impacting consumers.

Wholesale prices in the United States picked up more than expected in January, according to Labor Department data released Thursday, bumped up by goods costs and fueled by higher gasoline prices.

The producer price index [PPI], a measure of wholesale inflation, bounced 0.7 percent in January from December, at a quicker pace than analysts predicted.

A rise in prices for goods led the January advance, said the Labor Department, adding that a significant factor was gasoline prices. Energy prices also contributed to elevated consumer inflation in January.

On an annual basis, PPI rose 6.0 percent last month, down from December's reading.

"While producer prices are off their peaks, inflation is elevated and the monthly change in prices showed a move in the wrong direction last month," said Rubeela Farooqi, chief US economist at High Frequency Economics.

"These data will keep the (Federal Reserve) on track to raise interest rates further... in order to get inflation back towards the two percent target," she said.

To rein in surging prices, the US central bank raised interest rates multiple times last year in hopes of cooling demand, with the interest-sensitive housing industry slumping.