Surge in vegetable prices pushed up wholesale inflation in January
A sharp jump in the cost of vegetables led wholesale prices to rise at a seasonally adjusted rate of 0.2% in January compared with the previous month, the biggest increase since the summer, the Labor Department said Wednesday.
The Producer Price Index for finished goods. one of several gauges of inflation, had dropped for three straight months, including a 0.3% decline in December, before January’s rise.
The main driver of January’s increase was a 0.7% jump in food prices. The costs of fresh and dry vegetables were up 39% from December, as cold weather in California and elsewhere damaged crops.
Prices for soft drinks, candy and nuts also rose. The higher cost of food offset a 0.4% drop in energy prices.
Food and energy prices are the most volatile components of the index. The so-called core Producer Price Index also rose at a seasonally adjusted rate of 0.2% in January from the previous month as opposite moves in food and energy costs canceled each other out.
A major factor in the increase of the core index was a 2.5% rise in drug costs. it was the third straight monthly rise for core prices, the Labor Department said.
The rise in prices largely was in line with analyst expectations. The median estimate of economists surveyed by Bloomberg was for a 0.3% increase in the Producer Price Index and a 0.2% increase in the core index.
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