US producer inflation flat in February despite Trump tariffs
The producer price index (PPI) was unchanged last month, down from January’s 0.6% increase
[WASHINGTON] US producer inflation was flat in February, defying expectations of an uptick as President Donald Trump’s tariff hikes targeting Chinese goods took effect – although there was a pick-up in goods costs, this was offset by a decline in services.
The producer price index (PPI) was unchanged last month, down from January’s 0.6 per cent increase, said the Labor Department.
A consensus forecast of analysts expected a 0.3 per cent jump in February.
“In February, a 0.3-per cent increase in prices for final demand goods offset a 0.2-per cent decline in the index for final demand services,” the department added in its report.
A surge in food prices by 1.7 per cent boosted goods costs in February, while energy costs cooled.
Among products, prices for chicken eggs jumped 53.6 per cent, while increases were also seen in products like pork and vegetables.
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But the index for services saw its biggest decline since mid-2024, the report said.
“The February decrease can be traced to margins for final demand trade services, which dropped 1.0 per cent,” the department added.
Compared with a year ago, PPI was up 3.2 per cent.
Excluding the food, energy and trade sectors, PPI grew 0.2 per cent in February and 3.3 per cent from a year prior.
The movements came despite Trump’s sweeping tariffs on Chinese goods, with the US president widening levies in March to impact products from Canada and Mexico too.
On Wednesday, Trump’s further duties on steel and aluminum imports took effect, triggering pushback from other countries.
While the initial China tariffs have so far not shown up much in consumer inflation either, Trump’s broadened moves have attracted a range of retaliation from major US trading partners.
Analysts expect the full effects of such tit-for-tat tariff policies to ripple through the world’s biggest economy in the coming months. AFP
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