US producer prices unexpectedly fall in February
US producer prices unexpectedly fell in February and the rise in prices in January was not as large as initially thought, offering some hopeful signs in the fight against inflation.
The producer price index for final demand slipped 0.1 per cent last month, the Labor Department said on Wednesday (Mar 15). Data for January was revised down to show the PPI increasing 0.3 per cent instead of 0.7 per cent as previously reported.
In the 12 months through February, the PPI increased 4.6 per cent after rising 5.7 per cent in January. Economists polled by Reuters had forecast the PPI gaining 0.3 per cent on the month and advancing 5.4 per cent year-on-year.
The government reported on Tuesday that consumer prices rose strongly in February, though the annual increase was the smallest since September 2021. The decline in the PPI was led by a 0.2 per cent drop in goods prices, which followed a 1.2 per cent increase in January. A 36.1 per cent plunge in the cost of eggs accounted for more than 80 per cent of the decrease in goods prices.
There were also decreases in the prices of residential natural gas, fresh and dry vegetables, diesel fuel, home heating oil, and primary basic organic chemicals. But prices for iron and steel scrap jumped 10.6 per cent. Gasoline prices also rose.
Excluding the volatile food and energy components, goods prices gained 0.3 per cent after climbing 0.6 per cent in January.
Services prices fell 0.1 per cent for a second straight month. There were decreases in margins for machinery and vehicle wholesaling, which fell 3.9 per cent. Prices for wholesale chemicals and allied products, automobiles and parts retailing, guestroom rental, and airline passenger services also declined.
But the cost of outpatient care rose 0.5 per cent. Securities brokerage, dealing, investment advice and related services as well as and loan services also increased.
Excluding food, energy and trade services components, producer prices rose 0.2 per cent in February. The core PPI increased 0.5 per cent in January. In the 12 months through February, the core PPI advanced 4.4 per cent, matching January’s gain. REUTERS
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