WASHINGTON — The January PPI probably largely can be ignored as giving no real signals about the path of general prices.

January PPI was up 0.2%, core rose 0.2% (0.2176% unrounded) for a 1.4% rise overall and a 1.8% gain in core over the year.

In core most of the gain stems from a 2.5% climb in pharmaceutical preparations. Pharmaceuticals also had a large 2.5% jump in January 2012, so perhaps this is the usual list price test at the beginning of a year. Unadjusted pharmaceuticals prices were up 3.5%, which a Bureau of Labor Statistics economist termed modest for January.

Communications equipment prices gained 0.6% and industrial process control instruments rose 2.6% (the biggest gain since January 1997) also added, though their weights were much smaller.

Food advanced 0.7% on jumps in vegetables and cheese. In particular, broccoli, cauliflower and lettuce prices jumped.

Energy prices fell 0.4% as gasoline posted a 2.1% decline (a 1.4% increase before adjustment so all the move was in the seasonal) and most other energy areas fell. A BLS economist also said the mid-January pricing date also could have missed subsequent price hikes in gasoline.

Intermediate PPI was flat and crude rose 0.8% on energy gains, rounding out the report. These prices are not necessarily being passed ahead.

This was not a bad start to the year and also overall not far off expectations, which were revised lower after new seasonal adjustments were released last week. In 2012, the PPI gained in Q1 only to retreat in the spring as the economy slowed. Whether a similar pattern plays out in 2013 remains to be seen.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

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