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US producer prices fall; unchanged from a year ago
[WASHINGTON] US producer prices fell in February on lower energy and food costs, but prices were unchanged from a year ago, suggesting the downward trend was near an end.
The Labour Department said on Tuesday its producer price index dropped 0.2 per cent last month after edging up 0.1 per cent in January. In the 12 months through February, the PPI was unchanged after falling 0.2 per cent in January.
It was the first time since January 2015 that the year-on-year PPI did not decline. Economists polled by Reuters had forecast the PPI dipping 0.2 per cent last month and gaining 0.1 per cent from a year ago.
With the dollar losing some momentum after gaining 20 per cent against the currencies of the United States' main trading partners between June 2014 and December 2015, imported deflation is starting to wane. That could curb further declines in producer prices.
But oil prices, which tumbled by as much as 4 per cent on Monday on concerns that a six-week market recovery has gone beyond fundamentals, remain a wild card. So far this year, the dollar has gained about 0.9 per cent on a trade-weighted basis.
Last month, energy prices fell 3.4 per cent, with gasoline prices declining 15.1 per cent - the biggest drop in a year. Energy prices fell 5.0 per cent in January.
Wholesale food prices decreased 0.3 per cent, pulled down by a 19 per cent tumble in the cost of fresh and dry vegetables - the largest fall since April 2011.
Prices for services were unchanged in February after rising for three straight months.
A key measure of underlying producer price pressures that excludes food, energy and trade services rose 0.1 per cent last month after advancing 0.2 per cent in January. The so-called core PPI was up 0.9 per cent in the 12 months through February. That was the largest gain since July 2015 and followed a 0.8 per cent increase in January.