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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: im a survivor who wrote (33721)	3/16/2001 9:03:09 AM
From: stockman_scott	Respond to of 65232

Wholesale Prices Tame in February Friday March 16, 8:55 am Eastern Time By Caren Bohan <<WASHINGTON (Reuters) - U.S. wholesale prices barely rose in February, the government said on Friday in a report that may give Federal Reserve policymakers added comfort as they weigh interest-rate cuts next week. The Labor Department's Producer Price Index, measuring prices paid to businesses for goods like clothing and gasoline that are ready for sale, increased only 0.1 percent last month. Stripping out volatile food and energy costs, the ``core'' PPI fell 0.3 percent, the steepest decline since a 1.2 percent drop in August 1993. The soft PPI numbers were especially good news in light of the sharp increase in the prior month's report. In January, the PPI jumped 1.1 percent overall and rose 0.7 percent excluding food and energy. U.S. economists in a Reuters survey had expected the PPI to stay flat, both overall and in the core index. Economists welcomed the tame price figures and said the drop in the core rate showed inflation pressures receding. ``It indicates that inflation is ebbing. That is the stumbling block for the Fed, because if they are worried about inflation they are not going to be aggressive in cutting rates,'' said Paul Cherney, a market analyst at S&P Marketscope. The Fed, which slashed interest rates by a full percentage point in January to jump-start the flagging economy, is expected to cut rates again at its meeting on Tuesday. Many economists believe it will reduce the federal funds rate for overnight bank lending by a half-percentage point. When the PPI spiked in January, some economists had worried that inflationary pressures might force the Fed to move more cautiously on rate cuts but the latest report should ease some of the concerns. In February, energy costs climbed 1.4 percent, while food prices rose 0.6 percent. But elsewhere in the economy, there were few signs of any price pressures. The cost of passenger cars tumbled 1.5 percent. Capital equipment costs declined 0.3 percent.>>