A second report from the Labor Department on Thursday showed the producer price index for final demand rebounded 0.7% in January, the largest increase since June, after decreasing 0.2% in December. The rise was led by a 1.2% advance in goods prices, which followed a 1.4% decline in December.
Services increased 0.4%, matching December's gain. They were driven by a 1.4% jump in hospital outpatient care. Portfolio management fees also rose as did airline fares. With the CPI and PPI data in hand, economists estimate that the core PCE price index rose 0.5% in January after increasing 0.3 in December. In the 12-months through January, the core PCE price index is forecast advancing 4.5% after increasing 4.4% in December. The Fed has a 2% inflation target.