2024-03-14 20:40:07
Producer prices in the United States rose in February at the fastest pace in months, driven by higher energy prices, reinforcing fears of a delay in inflation returning to the Federal Reserve’s target.
Bureau of Labor Statistics data released Thursday showed the Producer Price Index, which measures the average change in prices that producers and manufacturers pay to suppliers, rose 1.6 percent year over year in February, higher than market expectations of a rise of only 1.1 percent.
On a monthly basis, the producer price index rose 0.6 percent, while energy prices rose 4.4 percent, the highest monthly increase since August 2023.
The rise in the Producer Price Index comes two days following a similar reading from the Consumer Price Index, which raised doubts regarding the Federal Reserve’s intention to reduce interest rates in the next two meetings, especially with Bank President Jerome Powell’s confirmation of sticking to the current policy until it is confirmed that the inflation rate is heading towards Target 2 in The hundred.
The consumer price index rose to 3.2 percent in February, compared to the rate of 3.1 percent in January.
Energy prices and the Federal Reserve
Fuel prices, especially gasoline, rose to their highest levels in four months due to a seasonal rise in demand, which led to a rise in the consumer price index in February.
Although the Fed relies on core inflation measures that exclude more volatile items like food and energy, February’s data highlights the central bank’s long and winding road to lowering inflation.
“This is certainly a signal that, in all respects, both fundamental and otherwise, we still have challenges on getting inflation down,” Kyle Anderson, an assistant professor of business economics at Indiana University’s Kelley School of Business, told CNN in an interview.
Bureau of Labor statistics said that energy prices accounted for 70 percent of the increase in demand for goods in February, but when energy and food are taken out of that equation, demand for goods will remain 0.3 percent higher than in January, touching the highest monthly gains seen. During the past year.
(Alicia Wallace, CNN)
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