Producer prices rise in January

Producer prices rose more than expected in January.

PPI for final demand increased 0.1% month-on-month, and fell 0.2% year-on-year.

A 1% increase in food costs, especially for fresh vegetables and beef, led the rise in costs that producers paid.

Energy prices tumbled 5%.

Economists had estimated that PPI for final demand fell 0.2% month-on-month in January, and dropped 0.6% year-over-year, according to Bloomberg.

Leaving out volatile food and energy costs, PPI rose 0.4% compared to December, and rose 0.6% year-on-year.

Excluding food and energy, economists had forecast that producer prices rose 0.1% compared to December, and increased 0.4% against the prior year.

The PPI data look at inflation from the producers' perspective, and are used as a forward-looking indicator for consumer prices, since sellers would likely pass their higher costs to buyers through more expensive items on shelves.

Inflation is still shy of the Fed's 2% target.

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