The numbers: U.S. wholesale prices jumped 1% in January and showed there’s still plenty of inflation bubbling up in an economy facing its worst cost pressures in four decades.
The uptick in wholesale prices blew past investor expectations. Wall Street economists had forecast a 0.5% increase.
Wholesale prices reflect what businesses pay for supplies such as grains, metals, lumber, packaging, computer chips and so forth. When companies pay higher prices, the cost is often passed onto customers and contributes to inflation.
The increase in wholesale prices over the past year, meanwhile, slowed a tick to 9.7% from 9.8%.
Still, that’s the biggest advance in the index was configured in 2009 and likely one of the fastest rates since the early 1980s.
Big picture: Inflation is running rampant and the Federal Reserve is preparing to embark on a series of interest-rate increases starting in March to try to douse price pressures.
American households are paying 7.5% more for goods and services now compared to one year ago, a survey of consumer prices showed last week. While inflation is likely to subside later in the year, many economists doubt it will fall below 3%.
Before the pandemic, inflation had been rising an average of 1.5% a year.
Stocks have fallen recently on worries about the Fed raising interest rates to combat high inflation and the possibility of war in Ukraine.