WASHINGTON — U.S. wholesale prices barely increased last month after falling for three straight months, a sign there is little inflation pressure in the economy.
The producer price index — which measures price changes before they reach the consumer — rose 0.1 per cent in February, the Labor Department said Wednesday. It slipped 0.1 per cent in January. Excluding volatile food and energy costs, core producer prices also rose 0.1 per cent. Wholesale prices increased 1.9 per cent from a year earlier, and core prices rose 2.5 per cent.
Despite an unemployment rate near a five-decade low and faster wage growth, inflation is tame. The consumer price index, released Tuesday, increased just 1.5 per cent in February from a year ago. Mild inflation is a major reason the Federal Reserve has paused its interest rate hikes.
The Fed lifted rates four times last year, but Fed Chairman Jerome Powell has since emphasized that the central bank sees little need to lift rates now and will monitor incoming data for any signs of rising inflation.
Last month’s increase was driven by more expensive gas, pricier plane tickets and a jump in hotel costs, which rose by the most in nearly a decade of record-keeping.
Food costs fell, led by a 12.8 per cent drop in prices of fresh and dry vegetables, and cheaper frozen foods and chickens.
Wholesale price increases have slowed in the past year. Twelve months ago, the producer price index rose 2.8 per cent from a year earlier, nearly a full percentage point higher than last month’s pace.
Christopher Rugaber, The Associated Press