The U.S. Bureau of Labor Statistics (BLS) reported on January 30, 2026, that the Producer Price Index (PPI) for final demand rose 0.5% month-over-month in December 2025 (seasonally adjusted), exceeding consensus forecasts of +0.2%. On an unadjusted annual basis, headline PPI increased 3.0% year-over-year.

Core PPI (final demand less foods and energy) accelerated more sharply:

  • +0.7% MoM (forecast: +0.2%; largest monthly gain since July 2025)

  • +3.3% YoY (forecast: 2.9%; up from 3.0–3.1% in November)

The more stable measure excluding foods, energy, and trade services rose 0.4% MoM and 3.5% YoY, marking its eighth consecutive monthly increase.

Key Drivers:
The advance was entirely driven by services prices, which rose 0.7% MoM, the largest gain since July. Two-thirds of this increase stemmed from a 1.7% surge in final demand trade services margins, with machinery and equipment wholesaling contributing a 4.5% jump. Goods prices were unchanged month-over-month.

Analysts have noted potential pass-through effects from import tariffs, alongside broader service-sector pressures (e.g., portfolio management, airline fares, and hotel rooms).

Market and Economic Implications:
This hotter-than-expected reading signals persistent underlying inflation pressures and could delay anticipated Federal Reserve rate cuts. Markets reacted with modest dollar strength, rising Treasury yields, and pressure on risk assets. For crypto and equities, the data reinforces a "higher for longer" interest rate environment, potentially weighing on liquidity-sensitive sectors in the near term.

What to Watch Next:
Focus on the December Consumer Price Index (CPI) and especially the Fed’s preferred core PCE measure (due mid-February). Persistent strength in producer prices may feed through to consumer inflation.

The data underscores that inflation remains sticky despite earlier cooling trends. Investors should monitor upcoming releases and manage exposure accordingly.

Sources: U.S. Bureau of Labor Statistics, Reuters, Bloomberg, Trading Economics.

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