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Friday March 12, 8:44 am Eastern Time
U.S. wholesale prices show largest drop in a year
WASHINGTON, March 12 (Reuters) - U.S. wholesale prices recorded their biggest drop in more than a year in February, the government said on Friday, adding to evidence that inflation is absent despite a roaring economy.
The Produce Price Index, measuring prices received for goods produced by the nation's factories, farms and refineries, fell 0.4 percent last month following a 0.5 percent rise in January. February's decline was the steepest since a decrease of 0.6 percent in January 1998.
A big portion of the decline was caused by falling food costs. Prices of meats and vegetables plummeted in February and were only partly offset by firmer prices for fish and fresh fruits.
Energy costs were also sharply lower, falling 1.0 percent. Home heating oil costs fell a huge 4.1 percent and costs of natural gas and electricity eased. The gasoline component rose a slight 0.2 percent.
But even stripping out the volatile food and energy sectors, the core PPI came in flat, continuing a trend of soft wholesale prices that has taken hold over the past year and half amid weakness in the global economy.
The milder-than-expected PPI report should help soothe concerns about a possible move by the Federal Reserve to push up interest rates to rein in the booming economy. The wholesale price news combines with other reports, such as productivity statistics, to portray an economy that is remarkably free of inflationary pressures even as it steams ahead at a brisk pace. U.S. economists polled by Reuters last week had forecast, on average, a 0.1 percent decline in the Producer Price Index and an increase of 0.1 percent excluding food and energy. |
