US producer prices rise more quickly than anticipated in January

According to the U.S. Department of Labor, in seasonally adjusted terms the producer price index rose at a month-on-month pace of 0.3% (consensus: 0.1%).

Food prices declined by 0.3% in comparison to the prior month while those for energy fell by 1.7%.

Services prices on the other hand jumped by 0.6%.

The annual rate of increase in headline producer prices meanwhile dipped from 1.0% in December to 0.9% in January.

That was nevertheless more than the consensus forecast for a gain of 0.6%.

At the core level, producer prices were ahead by 0.5% over the month (consensus: 0.1%) and by 2% in comparison to a year ago (consensus: 1.6%).

Core prices exclude the often volatile categories of food and energy from the calculation in an attempt to avoid distortions.

"Finally, the release of the PPI data means we can finalize our core PCE forecast for January, at 0.32%. That would be the biggest increase since September, but the three months since then all saw much smaller gains," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

"Note too that nearly a quarter of the January increase will come from the portfolio management component, which just lags the stock market. Bottom line: One disappointing month does not change the trend, and none of the inflation fundamentals have changed."