Wholesale prices rose in February

WASHINGTON >> Wholesale prices in the United States accelerated again in February, the latest sign that inflation pressures in the economy remain elevated and might not cool in the coming months as fast as the Federal Reserve or the Biden administration would like.

The Labor Department said Thursday that its producer price index — which tracks inflation before it reaches consumers — rose 0.6% from January to February, up from a 0.3% rise the previous month. Measured year over year, producer prices rose by 1.6% in February, the most since last September.

Higher wholesale gas prices, which jumped 6.8% just from January to February, drove much of last month’s increase. Wholesale grocery costs also posted a large gain, rising 1%.

Yet even excluding the volatile food and energy categories, “core” inflation was still higher than expected in February. Core wholesale prices rose 0.3%, down from a 0.5% jump the previous month.

Compared with a year ago, core prices climbed 2%, the same as the previous month. Core inflation, which tends to provide a better sign of where inflation may be headed, is watched particularly closely.

Consumer inflation has plummeted from a peak of 9.1% in 2022 to 3.2%. Yet many Americans are exasperated that average prices remain about 20% higher than they were before the pandemic erupted four years ago.

The producer price index can provide an early read on where consumer inflation is headed. It is also closely watched because some of its data is used to compile the Fed’s preferred inflation gauge, known as the personal consumption expenditures price index.

Thursday’s producer price index report suggested that core prices in the Fed’s gauge rose 0.3% last month, according to economists at Capital Economics, and are up 2.8% compared with a year ago. The year-overyear measure, if accurate, would be unchanged from the previous month.

Thursday’s data follows a report earlier this week on the government’s most closely watched inflation measure, the consumer price index. The CPI rose by a sharp 0.4% from January to February, a faster pace than is consistent with the Fed’s 2% inflation target.

Compared with a year earlier, prices rose 3.2%, up from a 3.1% increase rise the previous month.

The CPI report marked the second straight pickup in consumer prices.

Inflation had been expected to tick higher in January and February, in part because companies typically impose price increases at the beginning of the year.