PRODUCER PRICES UP 1% IN JANUARY

The Producer Price Index (PPI) was up a whopping 1.0% in January due to rising energy, food, and medicine prices. The gain was more than double what economists had been expecting.

From USA Today:

Producer prices were up 7.4% from January of last year, the steepest climb since October 1981, the Labor Department said.

The worse-than-expected performance is certain to capture attention at the Federal Reserve. Fed officials have chosen to combat a threatened recession by aggressively cutting interest rates, believing that they have room to do so because weak economic growth will keep a lid on prices.