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

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.

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.