Bloomberg March 15, 2023
US producer prices unexpectedly declined in February, pointing to an easing of cost pressures in corners of an economy still battling the highest inflation in a generation. The producer price index for final demand fell 0.1% from the prior month and increased 4.6% from a year earlier, according to data out Wednesday from the Bureau of Labor Statistics. Excluding the volatile food and energy components, the so-called core PPI was unchanged from a month earlier.
The median estimates in a Bloomberg survey of economists called for the overall PPI to increase 0.3% from a month earlier and for the core gauge to rise 0.4%.The decline in the PPI reflected decreases in both goods and services. That said, more than 80% of the retreat in merchandise can be attributed to a drop in the cost of eggs, the agency said. Services prices were restrained by machinery and vehicle wholesaling.
The data come just a day after the closely watched consumer price index showed broad-based and persistent inflation, buoyed by a strong labor market. The PPI, which is a measure of wholesale prices, has slowed significantly on a year-over-year basis amid improving supply chains and declines in many commodities.
When paired with Tuesday’s CPI and turmoil in the banking sector, the data present a tricky picture for Federal Reserve officials as they deliberate whether to extend interest-rate increases at next week’s meeting.