The 0.6 percent gain in the producer-price index followed a 0.2 percent advance the prior month, a Labor Department report showed Tuesday. For the year, the measure rose only 1.6 percent, down a tenth from the result recorded in December. Economists had expected prices to increase by 0.3%.
The Federal Reserve during most of 2016 refrained from raising rates too quickly for fear of interrupting a fragile recovery but has taken a different view of the likely course of monetary policy in 2017, citing "uncertainty" as President Donald Trump's fiscal policies have yet to take shape.
Compared to the same month a year ago, producer prices were up by 1.6 percent in January, unchanged from December.
Energy prices rose strongly on the month by 4.7%, primarily due to a 12.9% surge in gasoline prices, and the energy sector was the main impetus behind rising prices.
Higher raw materials costs are pushing up inflation across the globe. Oil prices have risen above $50.00 USA per barrel. In China, producer prices climbed in January by the most since 2011.
Moreover, the department said, wholesale food prices were unchanged after climbing 0.5% in December. Transportation and warehousing services prices climbed 1.1 percent. The index for final demand services moved up 0.3%.
If food, energy and retail margins are stripped out, the more stable core PPI index rose a smaller 0.2%. The other two are import costs and consumer prices.