US wholesale prices rose more than expected in February, according to government data published on Thursday (Mar 14), on a sharp monthly increase in the cost of goods paid by producers, fuelled by higher petrol prices.

The sharper than expected rise in producer prices will be closely followed by the US Federal Reserve, as it weighs the right time to start cutting elevated interest rates in its long-running battle against inflation.

“For the Fed, these data support a patient view on the future course of monetary policy,” High Frequency Economics chief US economist Rubeela Farooqi wrote in a note to clients.

The producer price index (PPI) rose 0.6 per cent in February, after rising by a higher-than-expected 0.3 per cent a month earlier, the Labor Department said in a statement.

This was above market expectations of a 0.3 per cent monthly rise, according to Briefing.com.

The index for final demand goods rose 1.2 per cent, while the services sector rose a more modest 0.3 per cent.

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“One-third of the February advance in the index for final demand goods can be traced to a 6.8 per cent increase in prices for petrol,” the Labor Department said in a statement.

The price of many other goods, including chicken eggs and jet fuel, also rose, while those of hay, hayseeds and oilseeds plummeted. AFP