Producer Prices Spike in January

The government's much-delayed report on January producer prices might have been worth the wait, as the data was full of surprises, including a larger-than-expected jump in the core rate to 0.3%.

Economists had forecast a 0.1% increase in prices, minus food and energy costs. The overall rate rose 0.6%, also well above the consensus expectation, which was 0.3%. Energy prices rose 4.7%, driven by a double-digit jump in gasoline.

After much smaller gains in December, when the headline and core rates rose 0.2% and 0.1%, respectively, the January readings could ring inflation alarms, especially with crude oil prices hitting a 13-year high Wednesday.

But the very reason for the report's delayed release may also warrant a more studied interpretation and tempered reaction. The Labor Department changed its industry classification system, which may make comparisons initially difficult, especially because the release of February data, which was originally scheduled for this week, has been postponed indefinitely.

Spikes in producer prices are not uncommon in the early months of the year, largely because of volatile energy prices, which was especially true this year when energy costs rose more sharply in January than they did in February.

Consumer price index data for the past months may bear that out. Prices rose 0.3% last month, after a 0.5% increase in January. But excluding volatile food and energy prices, the core inflation rate increased more than expected at 0.2%, matching January's 0.2% rate. Economists were predicting the core index to rise only 0.1%.

More from Opinion

7 Takeaways From Google's $550-Million Investment in Alibaba Rival JD.com

7 Takeaways From Google's $550-Million Investment in Alibaba Rival JD.com

It's Just Not Smart For Investors to Ignore the Threat of a Trade War

It's Just Not Smart For Investors to Ignore the Threat of a Trade War

To Think a Trade War's Still Just a Threat Is the Dumbest Thing on Wall Street

To Think a Trade War's Still Just a Threat Is the Dumbest Thing on Wall Street

Flashback Friday in Politics: Trade Wars, Manafort, Immigration Dominate Minds

Flashback Friday in Politics: Trade Wars, Manafort, Immigration Dominate Minds

Microsoft and Sony's Rumored Game Console Plans Bode Well for AMD

Microsoft and Sony's Rumored Game Console Plans Bode Well for AMD