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U.S. Producer Price Index Rises 0.6% During January

Editor's Note: Updating earlier story to include comment from economist, more details from report, updated gold prices.

(Kitco News) -The U.S. Producer Price Index for final demand rose by a seasonally adjusted 0.6% in January, the government said Tuesday.

Going into the report, consensus expectations compiled by most news organizations had been for a smaller rise 0.3% in the headline figure.

The inflation data suggest that “things were heating up in January,” said Royce Mendes of CIBC Economics.

“While energy prices were a major contributor, they weren't the whole story,” Mendes said. “Even after stripping out food and energy, the index was up 0.4%. That could raise market expectations for tomorrow's CPI (Consumer Price Index) print, although PPI is not generally good leading indicator of monthly changes in consumer prices.”

The market briefly dipped, then climbed nearly back to where it was after having risen overnight on a stronger U.S. dollar. As of 8:47 a.m. EST, April gold was up $8.90 to $1,234.70 an ounce. Three minutes prior to the PPI data, the contract had been at $1,235.50 an ounce.

On a year-on-year basis, PPI for final demand rose 1.6%.

Market participants monitor the data as a gauge for inflation at the wholesale level. Traders get the index for inflation at the consumer level on Wednesday, along with January retail sales.

By Allen Sykora of Kitco News;



Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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