Washington, D.C. – February 15, 2025 – Wholesale inflation in the United States remained elevated last month, signaling potential challenges in the fight against rising prices. The Producer Price Index (PPI), which measures price changes at the producer level, rose 0.4% in January and 3.5% over the past year, according to the Bureau of Labor Statistics.
The increase was largely driven by surging food and energy prices, with diesel fuel jumping 10.4% and wholesale egg prices soaring 44% due to a severe outbreak of avian flu. The annual PPI rate has now reached its highest level since February 2023, defying economists’ expectations of a slowdown.
While core PPI, which excludes volatile food and energy prices, showed some easing—rising 0.3% monthly and 3.6% annually—concerns remain that elevated producer costs could soon be passed on to consumers.
The latest Consumer Price Index (CPI) report also indicated hotter-than-expected inflation at the retail level, reinforcing concerns that inflation is making a comeback.
“This stronger-than-expected PPI, following Wednesday’s hot CPI report, suggests inflation came roaring back in January,” said Paul Stanley, Chief Investment Officer at Granite Bay Wealth Management. “It also makes the Federal Reserve’s path clearer—there is little reason to cut interest rates anytime soon.”
With inflationary pressures persisting, economists warn that higher costs could weigh most heavily on lower-income households, who spend a larger share of their income on essential goods like food and energy.
