UNITED STATES NEWS

US wholesale inflation accelerated in January in latest sign that prices picked up last month

Feb 16, 2024, 6:42 AM

FILE - The Shell Ethane Cracker Plant on the Monongahela River in Monaca, Pa., is shown on Nov. 30,...

FILE - The Shell Ethane Cracker Plant on the Monongahela River in Monaca, Pa., is shown on Nov. 30, 2023. On Friday, Feb. 16, 2024, the Labor Department releases producer prices data for January. (AP Photo/Gene J. Puskar, File)
Credit: ASSOCIATED PRESS

(AP Photo/Gene J. Puskar, File)

WASHINGTON (AP) — Wholesale prices in the United States accelerated in January, the latest sign that some inflation pressures in the economy remain elevated.

The Labor Department reported Friday that its producer price index — which tracks inflation before it reaches consumers — rose 0.3% from December to January after having fallen -0.1% from November to December. Measured year over year, producer prices rose by a mild 0.9% in January.

The figures follow a surprisingly hot report this week that showed that consumer prices eased less than expected last month, signaling that the pandemic-fueled inflation surge is only gradually and fitfully coming under control.

Public frustration with inflation has become a central issue in President Joe Biden’s re-election bid. Measures of inflation have plummeted from their heights and are nearing the Federal Reserve’s target level. Yet many Americans remain exasperated that average prices are still about 19% higher than they were when Biden took office.

Some of Friday’s data is used to calculate the Fed’s preferred price measure, which will be reported later this month. That gauge has been running well below the better-known consumer price index. In the second half of 2023, the Fed’s favored measure showed that prices rose at just a 2% annual rate, matching its inflation target.

Fed officials have expressed optimism that inflation is headed lower, and in December they forecast that they would cut their benchmark rate three times this year. Last year, the Fed hiked its rate to a 22-year high of about 5.4% to extend its concerted drive to conquer high inflation. Its rate hikes, which were intended to cool borrowing and spending, have made it far more expensive to obtain mortgages, take out auto and business loans or use credit cards.

Should inflation return to the Fed’s 2% target, high borrowing rates would likely no longer be deemed necessary. Instead, the Fed would be expected to cut rates, which would make consumer and business loans more affordable.

Some Wall Street traders and economists had expected the Fed to implement its first rate cut as soon as March. But two weeks ago, Powell made clear that a cut that month was unlikely and said the Fed needed “greater confidence” that inflation is sustainably returning to its 2% target before it would start reducing rates. Most economists now envision a rate cut in May or, perhaps more likely, in June.

Fed officials have expressed optimism that inflation is headed lower, and in December they forecast that they would cut their benchmark rate three times this year. Last year, the Fed hiked its rate to a 22-year high of about 5.4% to extend its concerted drive to conquer high inflation. Its rate hikes, which were intended to cool borrowing and spending, have made it far more expensive to obtain mortgages, take out auto and business loans or use credit cards.

Should inflation return to the Fed’s 2% target, high borrowing rates would likely no longer be deemed necessary. Instead, the Fed would be expected to cut rates, which would make consumer and business loans more affordable.

Some Wall Street traders and economists had expected the Fed to implement its first rate cut as soon as March. But two weeks ago, Powell made clear that a cut that month was unlikely and said the Fed needed “greater confidence” that inflation is sustainably returning to its 2% target before it would start reducing rates. Most economists now envision a rate cut in May or, perhaps more likely, in June.

United States News

Associated Press

‘Catch-and-kill’ to be described to jurors as testimony resumes in hush money trial of Donald Trump

NEW YORK (AP) — A longtime tabloid publisher was expected Tuesday to tell jurors about his efforts to help Donald Trump stifle unflattering stories during the 2016 campaign as testimony resumes in the historic hush money trial of the former president. David Pecker, the former National Enquirer publisher who prosecutors say worked with Trump and […]

41 minutes ago

Associated Press

America’s child care crisis is holding back moms without college degrees

AUBURN, Wash. (AP) — After a series of lower-paying jobs, Nicole Slemp finally landed one she loved. She was a secretary for Washington’s child services department, a job that came with her own cubicle, and she had a knack for working with families in difficult situations. Slemp expected to return to work after having her […]

43 minutes ago

Several hundred students and pro-Palestinian supporters rally at the intersection of Grove and Coll...

Associated Press

Pro-Palestinian protests sweep US college campuses following mass arrests at Columbia

NEW YORK (AP) — Columbia canceled in-person classes, dozens of protesters were arrested at New York University and Yale, and the gates to Harvard Yard were closed to the public Monday as some of the most prestigious U.S. universities sought to defuse campus tensions over Israel’s war with Hamas. More than 100 pro-Palestinian demonstrators who […]

3 hours ago

Ban on sleeping outdoors under consideration in Supreme Court...

Associated Press

With homelessness on the rise, the Supreme Court weighs bans on sleeping outdoors

The Supreme Court is wrestling with major questions about the growing issue of homelessness as it considers a ban on sleeping outdoors.

4 hours ago

Arizona judge declares mistrial in case of rancher who shot migrant...

Associated Press

Arizona judge declares mistrial in the case of a rancher accused of fatally shooting a migrant

An Arizona judge declared a mistrial in the case of rancher accused of killing a Mexican man on his property near the U.S.-Mexico border.

4 hours ago

Associated Press

Trial opens for former Virginia hospital medical director accused of sexual abuse of ex-patients

NEW KENT, Va. (AP) — The former longtime medical director of a Virginia hospital that serves vulnerable children used physical examinations as a “ruse” to sexually abuse two teenage patients, a prosecutor said Monday, while the physician’s attorney “adamantly” denied any inappropriate conduct. The trial of Daniel N. Davidow of Richmond, who for decades served […]

5 hours ago

Sponsored Articles

...

DISC Desert Institute for Spine Care

Sciatica pain is treatable but surgery may be required

Sciatica pain is one of the most common ailments a person can face, and if not taken seriously, it could become one of the most harmful.

...

Day & Night Air Conditioning, Heating and Plumbing

Day & Night is looking for the oldest AC in the Valley

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.

...

Fiesta Bowl Foundation

The 51st annual Vrbo Fiesta Bowl Parade is excitingly upon us

The 51st annual Vrbo Fiesta Bowl Parade presented by Lerner & Rowe is upon us! The attraction honors Arizona and the history of the game.

US wholesale inflation accelerated in January in latest sign that prices picked up last month