March 21st, 2018

US wholesale prices rise 0.2 per cent in February

By Paul Wiseman, The Associated Press on March 14, 2018.

FILE - This Thursday, Feb. 22, 2018, file photo shows a display of Dole bananas in a Walmart in Pittsburgh. On Wednesday, March 14, 2018, the Labor Department reports on U.S. producer price inflation for February. (AP Photo/Gene J. Puskar, File)

WASHINGTON – U.S. wholesale prices rose 0.2 per cent in February as a pickup in services prices offset a drop in the cost of food and energy.

The Labor Department said Wednesday that the February increase in its producer price index was half January’s 0.4 per cent gain. Producer prices, which show inflation before it reaches consumers, have risen 2.8 per cent over the past year.

Energy prices fell 0.5 per cent in February, and food prices fell 0.4 per cent as fresh and dry vegetable prices plunged 27.1 per cent, most since May 2007. The wholesale price of services rose 0.3 per cent in February, matching the January increase. Transportation and warehousing prices rose 0.9 per cent, most since September. Excluding volatile food and energy prices, so-called core wholesale inflation rose 0.2 per cent for the third straight month.

Prices have been rising faster for producers than for consumers. The Labor Department reported Tuesday that consumer prices rose just 2.2 per cent over the past year. Core consumer inflation posted a 12-month gain of just 1.8 per cent.

The Federal Reserve wants to see inflation at roughly a 2 per cent annual pace. But the Fed’s preferred inflation measure has usually come in below that target for the past six years.

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