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Producer Prices: Pipeline Pressures Higher Again

February 16, 2023
Bottom Line:  Producer prices rose more than expected in January as energy prices rebounded. Core prices saw their biggest gains since last May. Goods prices, especially processed goods, rebounded as service prices continued to increase modestly. While trade, transportation and warehousing prices were only modestly higher and still trending lower, healthcare prices accelerated notably. We should note that, like in the CPI report, there were revisions to the seasonal factors, pushing up 2022's second half producer price readings. Core producer prices were no longer declining on a trend basis. The 3-months that ended in January saw annualized price gains of 4.7%, above the six-month pace of 3.8%, suggesting the downtrend in producer prices had lost momentum and was settling into a 3.5-5% range, a concerning level of pipeline inflation.
Article by Contingent Macro