The producer price index rose 0.7% in January which is slightly higher than the predicted 0.4%. This means that the prices suppliers charge firms for raw materials went up by 0.7%. If production costs increase, this will eventually be reflected in the prices firms charge consumers. The CPI (prices consumers pay for goods) also increased by 0.5%. . Both of these numbers are higher than predicted. One explanation the article gives for the in crease of these economic indicators is that it’s a relatively warm winter which leads to high energy costs which affects production and consumer spending. These increases indicate that inflation is still a problem in our economy. This is significant because the Fed is still trying to combat inflation. The Fed is still expected to continue to increase interest rates in the following month.
https://www.cnbc.com/2023/02/16/producer-price-index-january-2023-.html
2 comments:
Overall great post! I think that there is a common thread this month in terms of looking at inflation. I wonder if the FED will result in taking a different approach eventually seeing as inflation is still steadily increasing but I'm not sure what exactly that would look like.
It is definitely concerning to see inflationary numbers continue to rise. I believe that the fed will continue with their interest rate hikes as a main way to combat inflation. It will be interesting to see if they will still be able to have a "soft landing"
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