2018.02.1521:56:00UTC+00U.S. Producer Prices Increased in January

U.S. producer prices grew in January, lifted by solid gains in the cost of gasoline and healthcare, offering more evidence that inflation pressures were building up.

According to the Labor Department, its producer price index for final demand increased 0.4 percent in January after being unchanged in December. That boosted the year-on-year increase in the PPI to 2.7 percent from 2.6 percent in December.

A key gauge of underlying producer price pressures that excludes food, energy and trade services jumped 0.4 percent last month. The so-called core PPI edged up 0.1 percent in December.

Core PPI rose 2.5 percent in the 12 months through January, the largest increase since August 2014. That followed a 2.3 percent gain in December.

The relatively strong producer inflation report came on the heels of data on Wednesday showing a broad increase in consumer prices in January. Rising inflation was also backed by two regional manufacturing surveys on Thursday, which showed sharp increases in prices paid by factories for inputs.

Economists were unfazed by the sudden decline in industrial production in January, citing strong business sentiment surveys. Separate data also showed a rise in the number of Americans filing for jobless benefits, claims continued to point to a tightening labor market.

In a second report on Thursday, the Labor Department said initial claims for state unemployment benefits increased 7,000 to a seasonally adjusted 230,000 for the week ended Feb. 10.

Another report from the Fed showed industrial production dropped 0.1 percent in January as output at factories failed to increase for the second straight month. Industrial production, which rose 0.4 percent in December, was also weighed down by a 1.0 percent drop in mining output.