US Wholesale Prices Rose More Than Expected In January

US wholesale prices rose more than expected in January, according to government data published Friday, as services costs were lifted by a jump in the index for hospital outpatient care.

The producer price index (PPI) rose 0.3 percent in January after falling by 0.1 percent a month earlier, the Labor Department said in a statement.

This was above market expectations of a smaller 0.1 percent rise, according to Briefing.com.

"PPI inflation surprised to the upside in January," High Frequency Economics chief US economist Rubeela Farooqi wrote in a note to clients.

"The data show significant progress on producer prices from rates of change a year earlier," she added. "But like the CPI, monthly changes accelerated to start the year."

The uptick in producer prices follows a similar monthly increase in the headline consumer price index (CPI) inflation measure in January, which rattled financial markets and pushed away expectations of an imminent interest rate cut by the US Federal Reserve.

The news sent stocks falling, although they later regained some of their losses. US Treasury yields, which are heavily influenced by interest rate expectations, rose.

The "major factor" behind the rise in the services index was the 2.2 percent monthly rise in hospital outpatient care, while a range of other services also rose, the Labor Department said in a statement.

This helped to counteract the decline in the index for final demand goods, which was driven by a 1.7 percent decline in energy prices.