The US Producer Price Index exceeds expectations, driven by the service sector.

In January, the producer price index in the United States rose more than expected, mainly driven by the service industry, indicating that inflation pressure continues to exist. The report from the US Bureau of Labor Statistics on Friday showed that the producer price index rose by 0.5% on a month-on-month basis, the largest increase since September of last year, with the December revision showing an increase of 0.4%. The core index, excluding food and energy, recorded the largest increase since July. The strong wholesale price data for several months in a row further confirms the slow progress in fighting inflation. The increase in import tariffs on raw materials has prompted many manufacturers to protect their profit margins by raising prices or seeking other cost-saving measures. Excluding food and energy, the price increases in January belong to the largest since the beginning of 2022. Following the release of this report, US stock futures further declined, while US bond yields narrowed their losses.