Prices paid to US producers rose in February by more than forecast, driven by higher fuel and food costs that add to evidence inflation remains elevated.
The producer price index for final demand increased 0.6% from January, Labor Department data showed Thursday. The gauge rose 1.6% from a year earlier.
The so-called core PPI, which excludes volatile food and energy categories, advanced 0.3% from the prior month, and 2% from a year ago.
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| Metric | Actual | Estimate |
|---|---|---|
| PPI (MoM) | +0.6% | +0.3% |
| PPI excl. food & energy (MoM) | +0.3% | +0.2% |
| PPI (YoY) | +1.6% | +1.2% |
| PPI excl. food & energy (YoY) | +2% | +1.9% |
The pickup in cost pressures at the wholesale level illustrates an uneven path for Federal Reserve policymakers seeking greater progress in their inflation fight. Consumer-price data earlier this week showed underlying inflation exceeded forecasts for a second month, reaffirming expectations that the Fed will be in no rush to reduce interest rates.
Fed officials meet next week and are widely expected to keep their benchmark rate unchanged.
One reason economists parse the PPI report is because several categories are used to inform the Fed’s preferred inflation measure — the personal consumption expenditures price gauge. The February reading of the PCE is due later this month.
Services costs increased 0.3% after a 0.5% gain. Prices paid for portfolio management, a key element of the PCE price index, climbed 0.2%, a sizable softening from the prior month. The cost of hospital outpatient care increased 0.5%.
Prices paid to producers for goods jumped 1.2%, the first increase in five months.
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