U.S. Producer Prices Remained Tame in February

A gauge of business prices inched up in February, a sign that underlying inflation pressures remain muted.

The producer-price index, a measure of the prices businesses receive for their goods and services, rose a seasonally adjusted 0.1% in February from a month earlier, the Labor Department said Wednesday. When excluding the often-volatile food and energy categories, prices were up 0.1% in February from the prior month. Prices excluding food, energy and a volatile gauge of margins called trade services also rose 0.1% last month.

Economists polled by The Wall Street Journal had expected a 0.2% one-month increase for each measure.

From a year earlier, overall prices were up 1.9% in February, while prices excluding food and energy rose 2.5% and prices excluding food, energy and trade services rose 2.3%.

Last month’s increase was driven by higher energy prices, which rose 1.8%. Energy prices are volatile and have fluctuated in recent months. Prices for integrated microcircuits and beef and veal also moved up. Those increases helped push the price index for goods up by 0.4% after three straight months of declines. Goods prices rose 0.6% on the year.

Prices for services, which represent about two thirds of the overall price index, were flat on the month following a 0.3% increase in January. Service prices were up 2.5% on the year.

The producer-price measure typically tracks the same trends as other broad inflation gauges, though it does not always translate into what consumers pay. A gauge of prices paid by the average American, the consumer-price index, eased, with prices rising 1.5% in February from a year earlier, the slowest pace since September 2016.

Slower inflation, coupled with a murky global and domestic economic outlook, has led the Federal Reserve to put interest rate rises on hold at the moment.
Source: Dow Jones