U.S. wholesale prices surged in January and core inflation also climbed above expectations.


The producer price index for finished goods rose 1.0% on a seasonally adjusted basis after a 0.3% decrease in December, the Labor Department said today.

The core index, which excludes food and energy items, rose 0.4% last month, seasonally adjusted. It rose 0.2% in December.

Wall Street expected smaller price increases. Economists had called for a 0.4% jump in the overall index and a 0.2% increase in the core index.

In the 12 months ending in January, prices climbed 7.4% on an unadjusted basis. In the 12 months ending in December, prices were up 6.3%. The 7.4% climb is the largest since 7.5% in October 1981.

The PPI data showed energy prices in the wholesale sector increased 1.5% last month, after falling 3.0% in December. Gasoline last month rose 2.9%. Residential natural gas was up 0.7%.

Food prices advanced 1.7% in January, after rising 1.4% in December.

Prices of passenger cars rose 0.3%, after falling 0.5% in December. Light motor trucks also rose 0.3%.

Prices of tobacco products dipped 0.1%. Alcoholic beverages rose 0.2%.

Pharmaceutical preparations climbed 1.5% in January.

Book publishing rose 1.7%. Furniture climbed 0.4%.

The PPI data also revealed a pickup of prices for goods down the production pipeline. Raw materials rose 2.5% in January, up from a 1.1% rate of increase in December. Core crude goods increased 4.0% in January. Semi-processed goods rose 1.4%, compared to December’s 0.2% decrease. Core intermediate goods increased 0.8% in January.