The US Labor Department reported on Thursday that producer prices in the U.S. escalated significantly beyond expectations in February. The producer price index for final demand rose by 0.6% in February, showing an increase from the 0.3% rise in January. This surpassed the economists' forecast of a steady third consecutive 0.3% rise.
The annual rate for producer price growth also ascended to 1.6% in February, up from a revised 1.0% in January. This increase was above economists' expectations of a rise to 1.1% from the previously reported 0.9% in the preceding month.
A significant rebound in energy prices contributed to notable monthly producer price growth. Energy prices spiked by 4.4% in February, recovering after the 1.1% decrease in January. In addition, food prices jumped 1.0% in February, following a 0.3% decline in January.
Excluding food and energy prices, prices for final demand goods and services both increased by 0.3% in February. The cost for trade services saw a 0.3% decline, while the expenses for transportation and warehousing services rose by 0.9%. Additionally, prices for other services increased by 0.5%.
Core producer prices, excluding prices for food, energy, and trade services, increased by 0.4% in February, following a 0.6% increase in January. The annual rate of core producer prices grew to 2.8%, rising from 2.7% in January.
Rob Swanke, Senior Equity Strategist for the Commonwealth Financial Network, commented that this data is likely to support the Federal Reserve's decision to remain on pause for the forthcoming few meetings.
The Labor Department also reported that consumer prices in the U.S. grew in line with forecasts in February. The consumer price index climbed by 0.4% in February, the same growth as in January. Similarly, core consumer prices, excluding food and energy, also rose by 0.4% in February.
Moreover, the annual rate of consumer price growth marginally increased to 3.2% in February from 3.1% the previous month, whereas the annual rate of core consumer price growth slowed to 3.8% in February from 3.9% in January, matching economists' predictions.
