The producer price index, a key gauge of inflation, surged higher in February, confirming that the pace of inflation has accelerated as the new year has got underway. | Economy
The producer price index, which measures the prices paid to U.S. businesses for their goods and services, rose by 0.6 percent in the second month of 2024, the Department of Labor said Thursday.
This was twice the rate of inflation in the producer price index, or PPI, recorded in January and twice what Wall Street was expecting.
Compared with a year ago, the index is up 1.6 percent, a significant acceleration from the 0.9 percent 12-month increase recorded in January. Economists had forecast a 1.2 percent increase.
This was the fastest monthly gain since August of last year and the highest yearly gain since September. The producer price index has risen in three out of the last four months.
Data from the consumer price index and the PPI in January and February suggests that the slowdown in inflation seen last year has stalled. This casts into doubt the timing and extent of interest rate cuts that might come from the Federal Reserve this eyar.
Stripping out food and energy prices, core PPI rose 0.3 percent for the month. That’s a step down from the 0.5 percent in Januuary but above the consensus estimate of 0.2 percent. Compared with a year ago, core PPI is up two percent, exactly the 12-month gain recorded in January.
Also excluding a category called trade services, which measures the mark up of retailers and wholesalers, prices rose 0.4 percent in February, down from the monthly gain of 0.6 percent at the start of the year.
