Home L.A. Times: Producer Prices In America Rise In A Sign Of Continued High Inflation

L.A. Times: Producer Prices In America Rise In A Sign Of Continued High Inflation

Increased fuel and food costs prices raised at highest in six months. The producer price index for final demand rose by the largest annual increase since last September. Prices paid to US producers rose in February at their highest pace in six months, driven by higher fuel and food costs, adding to evidence that inflation remains high. The producer price index for final demand rose 0.6% from January, Labor Department data showed Thursday. The index rose by 1.6% compared to the previous year, which is the largest annual increase since September.

Economy

July 7, 2024

byLos Angeles Times

A worker lifts goods with a crane inside a Woodland Group packaging warehouse in Elizabeth, New Jersey, United States, on January 17, 2024 - Source: CNBC World

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The core producer price index, which excludes the volatile food and energy categories, jumped 0.3% from the previous month and 2% from a year ago.

Rising cost pressures at the wholesale level highlight a mixed path for Fed policymakers seeking greater progress in their fight against inflation. Consumer price data earlier this week showed that core inflation exceeded expectations for the second month, confirming expectations that the Federal Reserve will not rush to cut interest rates.

Federal Reserve officials meet next week and are widely expected to keep interest rates unchanged.

The scale	Real	Estimated
Producer Price Index (monthly)	+%0.6	+%0.3
Producer price index excluding food and energy (monthly)	+%0.3	+%0.2
Producer Price Index (annual)	+%1.6	+%1.2
Producer price index excluding food and energy (annual)	+%2	+%1.9

CNBC World

Retail prices rise less than expected

Separate data showed on Thursday that retail sales rose less than expected last month after a sharp decline at the beginning of the year, underscoring concerns about the strength of consumer spending. Meanwhile, unemployment claims fell to their lowest level in three weeks.

One reason economists analyze the PPI report is that it is one of several categories used to determine the Federal Reserve’s preferred measure of inflation, a measure of personal consumption expenditures prices. The February reading of personal consumer spending is scheduled for release later this month.

Utility costs increased by 0.3% after rising by 0.5%. Prices paid for portfolio management, a key component of the PCE price index, jumped 0.2%, a significant decline compared to the previous month. The cost of outpatient hospital care increased by 0.5%.

Prices paid to producers for goods jumped 1.2%, the first increase in five months. About 70% of the increase came from energy costs.

Excluding food, energy and trade services, a less volatile measure of the producer price index, prices rose 0.4% after a 0.6% increase.

Costs of average-order manufactured goods, which reflect prices earlier down the production line, rose for the first time in five months due to a jump in capacity. Excluding food and energy, manufactured goods for average demand rose 0.5%, the largest rise since May 2022.