The report said the Labor Department's producer price index for final demand climbed by 0.5 percent in January after rising by a downwardly revised 0.4 percent in December.

The Labor Department also said the annual rate of producer price growth edged down to 2.9 percent in January from 3.0 percent in December.

The stronger than expected monthly producer price growth largely reflected a continued advance by prices for services, which grew by 0.8 percent in January after climbing by 0.7 percent in December.

Prices for trade services led the way higher, surging by 2.5 percent, while prices for transportation and warehousing services jumped by 1.0 percent and prices for other services were unchanged.

The increase in prices for services more than offset a decrease in prices for goods, which fell by 0.3 percent in January after edging down by 0.1 percent in January.

Prices for energy plunged by 2.7 percent and prices for food tumbled by 1.5 percent, but prices for goods excluding food and energy grew by 0.7 percent.

The report also said core producer prices, which exclude prices for food, energy and trade services, rose by 0.3 percent in January, matching the increase seen in December.

The annual rate of growth by core producer prices edged down to 3.4 percent in January from 3.5 percent in December.

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