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Wholesale-level inflation is significantly higher than expected in February, the latest sign that price pressures in the economy remain high and difficult to contain.
The Labor Department announced Thursday that it will measure the producer price index. Inflation at the wholesale level In February, prices rose 0.6% month-on-month before reaching consumers. On an annual basis, prices are still up 1.6%, the highest level since September 2023.
These numbers beat both the 0.3% monthly increase and the 1.1% annualized increase predicted by LSEG economists.
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In another sign of the persistence of high inflation, core prices, which exclude more volatile measures of food and energy, rose 0.3% over the month. This is higher than the 0.2% expected, but lower than the 0.5% recorded last month.
This figure increased by 2% on a 12-month basis and was unchanged from January.
Why are groceries still so expensive?
caused by high inflation severe financial pressure Most American households are being forced to pay more for everyday necessities like food and rent. The burden falls disproportionately on low-income Americans, whose already maxed-out paychecks are heavily affected by price fluctuations.
The data was released two days after the Labor Department said it was monitoring the situation more closely. consumer price indexThe index, which measures prices paid directly by consumers, rose 0.4% in February from the previous month and 3.2% from the same period last year, faster than economists expected.
A customer buys groceries at a grocery store on March 12, 2024 in San Rafael, California. (Photo by Justin Sullivan/Getty Images/Getty Images)
Both announcements are considered important indicators of inflation, and PPI is considered a leading indicator of inflationary pressures as costs are passed on to consumers. Various gauges show that it is still above the rate of inflation. federal reserve Desirable 2% target.
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As policymakers try to decide the next course of interest rates in 2024, the Fed signaled it is closely monitoring evidence that inflation continues to subside.
Central bank officials have opened the door to lower interest rates this year, but have said they will not do so until they are confident that inflation can be overcome.
This is a developing story. Please check back for the latest information.
