Producer Price Index (PPI) -- Final Demand (MoM)

January 2026 Report | Released February 2026

Headline Summary

The Producer Price Index (PPI) for final demand increased +0.5% month-over-month in January 2026, following a +0.4% gain in December. On a 12‑month basis, final demand prices rose +2.9%, signaling continued upstream inflation pressure within the production pipeline.

While headline inflation remains moderate compared to peak levels seen in prior years, the January acceleration suggests that producer-level pricing pressures are not fully contained.

Breakdown: Where the Pressure Is

• Goods: -0.3% MoM | +1.8% YoY
• Foods: -1.5% MoM | +5.5% YoY
• Energy: -2.7% MoM | 0.0% YoY
• Services: +0.8% MoM | +4.1% YoY

Core measures show resilience:

• Goods less foods & energy: +0.7% MoM | +2.5% YoY
• Services less trade & transportation: 0.0% MoM | +3.8% YoY
• Total less foods, energy & trade services: +0.3% MoM | +3.4% YoY

The divergence between goods disinflation and firm services pricing continues to define the current inflation regime.

Why This Matters for Markets

PPI measures inflation at the wholesale level and often acts as a leading indicator for Consumer Price Index (CPI) trends. Persistent producer pricing pressure—particularly in services—can filter into consumer inflation with a lag.

For traders and investors, key implications include:

• Upstream cost pressures may complicate Federal Reserve policy expectations.
• Sticky services inflation may limit near-term rate-cut narratives.
• Equity markets remain sensitive to inflation momentum shifts.

January’s data does not indicate a renewed inflation surge—but it does reinforce the idea that disinflation progress remains uneven.

Bottom Line

Producer prices moved higher to begin 2026, led by services while goods categories softened. The inflation picture remains mixed, suggesting the Federal Reserve will likely remain data-dependent rather than pivot decisively in the near term.

Source: U.S. Bureau of Labor Statistics (BLS), Producer Price Index – January 2026