Wholesale prices rose more than twice as fast as analysts predicted in January, in the latest sign that inflation is outstripping growth, Bloomberg reports. After a 0.3% drop in December, finished good prices rose 1% last month, with the core indicator up 0.4%, its biggest gain in almost a year. Fed chief Ben Bernanke will discuss the inflation statistics tomorrow when he delivers a policy report to Congress, MarketWatch notes.
The past year has seen a 7.4% hike in producer prices, the most since 1981. “What you’ve got is a lot of inflationary pressure building,” said one economist. But he believes the Fed, which has been cutting interest rates aggressively, will put those concerns on the back burner while the economy is still in turmoil. All three Labor reports on inflation have shown price increases.