US wholesale prices up 0.5% in January, most since late 2018

1010 WINS Newsroom
February 19, 2020 - 9:04 am

FILE - In this Feb. 5, 2020, file photo workers sort through tomatoes after they are washed before being inspected and packed, in Florida City, Fla. On Wednesday, Feb. 19, the Labor Department releases the Producer Price Index for January. (AP Photo/Wilfredo Lee, File)

WASHINGTON (AP) — U.S. producer prices climbed last month at fastest pace since October 2018 as higher prices for services more than offset a drop in the cost of energy.

The Labor Department said Wednesday that its producer price index, which measures inflationary pressures before they reach the consumer, jumped 0.5% in January after rising 0.2% in December. The monthly increase was much bigger than economists expected.

Over the past year, wholesale prices are up 2.1%.

Excluding volatile food and energy prices, so-called core producer inflation rose 0.5% in January from December and 1.7% from January 2019.

The Labor Department said much of the 0.7% January increase in services prices came from higher markups for clothes, jewelry, shoes and accessories.

Energy prices dropped 0.7% last month, pulled down by a 1.5% decrease in gasoline prices.

Food prices rose 0.2% in January. But the price of chicken eggs plummeted 42.4% last month, most in records dating back to 1937.

Last week, the Labor Department reported that consumer prices blipped up 0.2% last month and rose 2.5% over the past year. The Federal Reserve aims to keep annual consumer inflation around 2%.

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