U.S. producer prices increased by the most in more than a year in January, boosted by rises in the costs of services such as healthcare and hotel accommodation.

The Labor Department said on Wednesday its producer price index for final demand jumped 0.5% last month, the largest gain since October 2018, after climbing 0.2% in December.

In the 12 months through January, the PPI advanced 2.1%, the biggest increase since May, after rising 1.3% in December.

Economists polled by Reuters had forecast the PPI gaining 0.1% in January and rising 1.6% on a year-on-year basis.

Excluding the volatile food, energy and trade services components, producer prices increased 0.4%, the most since April, after rising 0.2% in December. The so-called core PPI increased 1.5% in the 12 months through January, matching December's rise.

The government last week reported a pickup in core consumer prices in January, which led economists to expect firmer readings in the inflation measure tracked by the Federal Reserve for its 2% inflation target.

Economists are forecasting that the core personal consumption expenditures (PCE) price index gained 0.2% in January, which would raise the annual increase to 1.7%, also as last year's weak readings are dropping out of the calculation.

The core PCE price index rose 1.6% on a year-on-year basis in December. It undershot its target in 2019. January PCE price data will be published next Friday.

The U.S. central bank last month left interest rates unchanged after reducing borrowing costs three times in 2019. The Fed is expected to keep monetary policy on hold at least through this year.

In January, wholesale energy prices fell 0.7% after jumping 1.5% in December. They were pulled down by a 1.5% drop in gasoline prices, which followed a 4.2% acceleration in December.

Goods prices edged up 0.1% last month after increasing 0.3% in December. Wholesale food prices gained 0.2% in January after falling 0.3% in the prior month. Core goods prices increased 0.3% last month. They gained 0.2% in December.

The cost of services rebounded 0.7% in January, the most since October 2018, after being unchanged in the prior month. Services accounted for 90% of the increase in the PPI last month. The cost of healthcare services rebounded 0.6% last month. Portfolio management fees accelerated 2.3% after jumping 1.9% in December.

Those healthcare and portfolio management costs feed into the core PCE price index. There were also increases in the costs of hotel accommodation and machinery and vehicle wholesaling.