U.S. January PPI - Still strong at the start of 2026
January PPI has made a strong start to 2026, with a stronger than expected 0.5% increase overall and an even stronger 0.8% increase ex food and energy, both following December gains that were almost as strong. Ex food energy and trade the picture is less alarming, up 0.3% for a third straight month, but even this is consistent with above target inflation persisting.
Food at -1.5% and energy at -2.7% both had soft months. Food has certainly lost momentum in recent months but energy weakness does not look likely to be repeated in February.
Commodity prices fell by 0.3% overall but surged by 0.7% ex food and energy, an acceleration from an already strong picture, suggesting tariffs continue to provide upward pressure, though this is likely to fade through 2026.
Services increased by 0.8% after a 0.7% December gain, led by a 2.5% rise in services where two straight strong gains have more than reversed declines seen in October and November.
Transportation and warehousing rose by 1.0% in an acceleration from an already strong trend but others services were unchanged after two straight modest gains of 0.2%.
Yr/yr data dipped slightly overall to 2.9% from 3.0% and to 3.4% from 3.5% ex food, energy and trade. However ex food and energy the pace accelerated to 3.6% from 3.3%.
Intermediate data shows a similar message to finished PPI, with weakness in food, energy subdued but goods ex good and energy firm. Intermediate services rise by 0.3%, led by trade.