Core wholesale prices rose 0.8% in January, much more than expected

Wholesale prices rose at a faster-than-expected pace in January, countering hopes that inflation was easing, the Bureau of Labor Statistics reported Friday.

The core producer price index, which excludes volatile food and energy prices, increased a seasonally adjusted 0.8%, more than the 0.6% gain in December and well ahead of the Dow Jones consensus estimate for 0.3%.

On an all-items basis, the headline PPI rose 0.5%, also above the forecast for 0.3% and 0.1 percentage point more than the prior month.

For the full year, core wholesale prices accelerated 3.6%, while the headline index posted a 2.9% gain. Both figures are well ahead of the Federal Reserve's 2% inflation goal and suggest that rising prices are still a factor for the U.S. economy.

Stock market futures added to losses following the report.

Services prices primarily drove the increase, with a 0.8% monthly rise that was the highest since July 2025. By contrast, goods prices actually fell 0.3%, though core goods prices climbed 0.7%.

More than 20% of the increase in services came from margins for professional and commercial equipment wholesaling. On the goods side, energy and food prices both fell while metals prices rose 4.8%.

Trade services prices surged 2.5%, helping boost pressures on wholesale inflation.

The report comes as President Donald Trump has repeatedly insisted that inflation has been tamed. Pipeline pressures as indicated by the PPI figures could keep the Fed cautious as it weighs its next moves on interest rates. Markets largely expect the Fed to stay on the sidelines until the summer, though Trump and other White House officials have pushed for lower rates.

Economists have worried that Trump's tariffs will push inflation higher, though Fed officials largely expect the impact to be temporary. There was some evidence of tariffs in the PPI data, with indexes for apparel and other goods such as intermediate components moving higher.

Trump lost a key Supreme Court ruling that overturned his move to use emergency measures to implement the tariffs. However, the president has cited other authorities that will allow him to implement the duties anyway.