Producer Prices Come in Hot in January on Services Strength

The Producer Price Index (PPI) for final demand rose 0.5% in January on a seasonally adjusted basis, following gains of 0.4% in December 2025 and 0.2% in November, according to the U.S. Bureau of Labor Statistics.

On an unadjusted basis, final demand prices increased 2.9% over the 12 months ended January 2026.

The January advance was driven primarily by services, where prices climbed 0.8%. This is the largest increase since moving up 0.9% in July 2025. In contrast, final demand goods prices fell 0.3%, highlighting the ongoing divergence between goods disinflation and more persistent service-sector cost pressures.

Core pipeline inflation also remained firm. The index for final demand less foods, energy and trade services rose 0.3% in January, marking its ninth consecutive monthly increase. On a year-over-year basis, the core measure is up 3.4%.

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Bureau of Labor Statistics

About Joe Palmisano

Joe Palmisano is editorial director of Connect Money, where he oversees daily coverage of alternative assets, direct investments, financial advisory and the economy. He brings three decades of experience as a financial journalist, analyst and portfolio manager. Before joining Connect Money, Palmisano wrote for The Wall Street Journal, covering foreign exchange, global fixed-income and equity markets. He later served as a senior research analyst and portfolio manager, producing market analysis and managing foreign exchange and U.S. equity portfolios for FX Concepts. His work has also appeared in SFO Magazine and CMT Association publications. Palmisano earned a bachelor’s degree in finance from The American University and holds the Chartered Market Technician (CMT) designation and is a member of the CFA Institute.

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