NEW YORK (CNNMoney.com) - Businesses paid more than expected for the goods they purchased in January, according to the government's reading on inflation at the wholesale level released Friday.

The Producer Price Index rose 0.3 percent in January, down from a 0.6 percent rise in December but more than the 0.2 percent rise forecast by economists surveyed by Briefing.com.

Inflation adjuster How much would: $ in: be worth today? Today's dollars: $

The so-called "core PPI," which excludes often-volatile food and energy prices, rose 0.4 percent in the month, up from a gain of 0.1 percent in December. Economists forecast an increase of 0.2 percent. It was the biggest jump in the core PPI since a rise of 0.6 percent in January 2005.

The report said that finished goods cost businesses 5.4 percent more than 12 months ago, up from the 4.4 percent 12-month gain reported for December.

Inflation has been an increasing concern of the markets. New Federal Reserve Chairman Ben Bernanke testified before congressional committees this week that he's concerned the economy is showing such strong growth that there's a risk of inflation -- which means a need for future hikes in interest rates.

Still the bond market seemed to shrug off the report, with Treasury prices moving slightly higher, and yields easing, following the report.

"Overall things came in a little higher than we were expecting. But I don't think it was a big surprise," said Gus Faucher, director of macroeconomics, Moody's Economy.com. "This is a small piece of the puzzle. I don't think it's going to change many minds on Fed (raising interest rates)."

Robert Brusca of FAO Economics said that without a rise in truck and car prices paid to automakers by dealers, the core PPI would have only risen 0.3 percent. A change in pricing and incentives by General Motors (Research) during the month helped cause that shift.

"Core trends are subdued and inflation pressures are not widespread," he said.

The PPI report can be more volatile than the Consumer Price Index report, due Tuesday, which measures inflation at the retail level. Economists are forecasting a 0.5 percent rise in the CPI, but only a 0.2 percent increase in core CPI.

Bond traders and economists are in agreement that another rate hike is likely at the next Fed meeting March 27 and 28. There is more disagreement about whether there will be an additional hike at the following meeting May 10, but Faucher said that this PPI will be a distant memory by the time that meeting occurs.

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