US producer prices rose modestly in January led by higher food prices, but overall inflationary pressures remained subdued, Labor Department data shows.
The producer price index rose 0.2 per cent in January, the second monthly gain in a row.
The December increase was revised down to 0.1 per cent from the prior estimate of 0.4 per cent.
Food prices jumped 1.0 per cent and energy prices rose 0.3 per cent.
Core PPI, excluding food and energy prices, rose 0.4 per cent.
The headline PPI number matched analysts' expectations, while core PPI was twice as high as anticipated.
"There has been some tendency for core inflation to be above trend in January in recent years," said Jim O'Sullivan of High Frequency Economics on Wednesday said.
"Trends still look quite tame."
Inflation remains below the Fed's 2.0 per cent inflation target.
The Labor Department introduced in January a new way of calculating producer prices, to expand the previous goods-focused calculation to include prices for services, construction, government purchases, and exports.
"We more than doubled the coverage of the economy," a Labor Department official said.
Compared with a year ago, producer prices rose 1.2 per cent in January while core PPI was up 1.1 per cent.
On Thursday the Labor Department reports on consumer prices in January.
Analysts forecast a 0.2 per cent rise after a 0.3 per cent increase in December.
