Producer prices post biggest annual increase since October 2018
Producer prices rose 2.8% year over year
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U.S. producer prices rose in February as the cost of energy spiked, leading to the sharpest annual increase in producer inflation in two and a half years.
The Labor Department said Friday that its producer price index for final demand rose 2.8% year over year, picking up from last month’s 1.7% annual increase. The February reading made for the largest annual increase since October 2018.
Prices edged up 0.5% month over month, slowing from the 1.3% increase in January.
Economists surveyed by Refinitiv had forecast PPI would rise 2.7% from a year ago and 0.5% versus the prior month.
More than two-thirds of the February increase was the result of prices for final demand energy climbing 6%. Nearly half of the jump in energy prices was due to a 13.1% increase in the cost of gasoline. Diesel fuel, meat and poultry, and electricity prices were some of the other goods that saw price increases.
Prices for fresh and dry vegetables, meanwhile, declined by 16.7%. Steel and bottled liquor prices (excluding brandy) also declined.
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Core producer prices, which exclude the volatility from food and energy, rose 2.5% year over year and 0.2% on a monthly basis. Analysts were expecting those prices to increase by 2.6% and 0.2%, respectively.