With energy prices showing a substantial increase in the month of February, the Labor Department released a report on Thursday showing that U.S. producer prices rose by slightly more than anticipated during the month.
The Labor Department said its producer price index rose by 0.7 percent in February after edging up by 0.2 percent in January. Economists had expected producer prices to increase by 0.6 percent.
The slightly bigger than expected increase in producer prices in February was largely due to a 3.0 percent jump in energy prices, which followed a 0.4 percent drop in the previous month.
Higher gasoline prices accounted for most of the jump in energy prices, with gas prices surging up by 7.2 percent for the month.
On the other hand, the report said food prices fell by 0.5 percent in February following a 0.7 percent increase in January.
The Labor Department said the drop in food prices was largely due to an 18.0 percent decrease in prices for fresh and dry vegetables.
Excluding the jump in energy prices and the drop in foods prices, the core producer price index inched up by 0.2 percent in February, matching the increase seen in the previous month as well as economist estimates.
The modest increase by the core index reflected a 0.2 percent increase in prices for pharmaceutical preparations as well as higher prices for plastic products.
The report also showed that the headline producer price index increased at an annual rate of 1.7 percent in February, reflecting an acceleration from the 1.4 percent growth seen in January.
However, the annual rate of core consumer price growth slowed to 1.7 percent in February from 1.8 percent in January, hitting a two-year low.
Friday morning, the Labor Department is scheduled to release a separate report on consumer prices in the month of February. Economists expect consumer prices to rise by 0.5 percent, while core prices are expected to inch up by 0.2 percent.
by RTT Staff Writer
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