WASHINGTON--U.S. producer prices rose faster than expected in January as higher gasoline prices and unusually cold temperatures helped boost energy costs, a government report showed on Thursday.
The Labor Department said the seasonally adjusted index for prices paid at the farm and factory gate rose 1.4 percent, following a 0.4% rise in December.
Analysts polled by Reuters had expected producer prices to increase 0.8% last month. Compared to January last year, producer prices increased 4.6%, the largest advance since October 2008. Markets had expected producer prices to increase 4.4% versus a year ago. It was the third consecutive 12-month increase.
The Labor Department said about three-fourths of the increase in PPI last month was due to a 5.1% jump in prices for energy goods. Energy costs were pushed up by a spike in prices for gasoline, liquefied petroleum and home heating oil.
Strong energy prices overshadowed a slowdown in the food prices, which rose 0.4% after increasing 1.3% in December.
Stripping out the volatile food and energy costs, core producer prices rose a faster than expected 0.3% last month after being flat in December. The core index had been forecast to rise 0.1% in January.
Investors are keeping a wary eye on inflation following massive efforts by the Federal Reserve to pull the economy out of its worst slump since the Great Depression of the 1930s. Low capacity utilization and a weak labor market are, however, keeping inflation pressures in check.
Core prices last month were lifted by a 1.9% surge in the index for light motor trucks.
The core producer price index rose 1% measured on a year-on-year basis, versus a forecast for a 0.8% gain
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