Financial News: U.S. Producer Prices Unexpectedly Flat In February

U.S. Producer Prices Unexpectedly Flat In February

(RTTNews) - With an increase in prices for goods offset by a decrease in prices for services, the Labor Department released a report on Thursday showing producer prices in the U.S. were unexpectedly flat in the month of February.

The Labor Department said its producer price index for final demand was unchanged in February after climbing by an upwardly revised 0.6 percent in January.

Economists had expected producer prices to rise by 0.3 percent compared to the 0.4 percent growth originally reported for the previous month.

The report also said the annual rate of growth by producer prices slowed to 3.2 percent in February from an upwardly revised 3.7 percent in January.

The annual rate of producer price growth was expected to dip to 3.3 percent from the 3.5 percent originally reported for the previous month.

Producer prices came in unchanged in February, as a 0.3 percent increase by prices for goods was offset by a 0.2 percent dip by prices for services.

Food prices led the monthly increase in prices for goods, jumping by 1.7 percent as prices for chicken eggs skyrocketed by 53.6 percent.

Meanwhile, the decrease by prices for services came amid a sharp pullback by prices for trade services, which slumped by 1.0 percent.

Excluding prices for food, energy and trade services, core producer prices crept up by 0.2 percent in February after rising by 0.3 percent in January.

The annual rate of growth by core producer prices slowed to 3.3 percent in February from 3.4 percent in the previous month.

"After hotter readings in December and January, flat producer prices for February should provide some assurances that inflation isn't taking off again," said Nationwide Senior Economist Ben Ayers.

He added, "But one month does not make a trend and the upward pressure for goods costs (even excluding the outsized increase for eggs) is a warning sign that imposed tariffs could drive prices higher in coming months."

A separate report released by the Labor Department on Wednesday showed consumer prices in the U.S. increased by slightly less than expected in the month of February.

The Labor Department said its consumer price index crept up by 0.2 percent in February after climbing by 0.5 percent in January. Economists had expected consumer prices to rise by 0.3 percent.

Excluding food and energy prices, the core consumer price index also rose by 0.2 percent in February following a 0.4 percent increase in January. Core prices were also expected to climb by 0.3 percent.

The report also said the annual rate of consumer price growth slowed to 2.8 percent in February from 3.0 percent in January. Economists had expected the pace of price growth to edge down to 2.9 percent.

The annual rate of core consumer price growth also slowed to 3.1 percent in February from 3.3 percent in January. Core price growth was expected to dip to 3.2 percent.

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