Producer Prices Dip in February

Prices paid to U.S. producers declined 0.1% in February, the Labor Department reported March 14.

Last month’s producer price index dip, the first since November, followed a rise of 0.2% in January. Economists’ had forecast a 0.2% rise, Bloomberg News reported.

The so-called core PPI, which excludes food and energy, increased 0.1%.

The weakness “could be weather-related as these firms try to clear some inventories,” said Sean Incremona, a senior economist at 4cast Inc., told Bloomberg. “There could be some near-term hit, but generally the picture is pretty stable. It’s a gradual, very gradual, step up toward the Fed target over the next couple years.”

Businesses have struggled to raise prices because of historically high levels of unemployment and little wage growth, making it difficult for consumers to pay more, The Associated Press reported.

The Labor Department revamped the PPI last month, the first major overhaul since 1978, to double its reach of the economy by including prices received for construction, exports, government purchases, services and goods.

The altered PPI encompasses 75% of the economy, up from just a third of all production, which previously reflected the cost of goods alone.


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