–YOY Rates +5.6% Overall and +1.8% Core
By Brai Odion-Esene
WASHINGTON (MNI) – U.S. wholesale prices rose faster than expected
in February, with energy prices rising further and food prices seeing
their highest increase since November 1974.
February’s producer price data adds to concerns that price hikes in
the early part of 2011 across a broad range of categories indicate
rising inflation this year.
February PPI rose 1.6%, the eighth gain in a row, and the largest
increase since wholesale prices rose by 1.9% in June 2009. Core price
index rose by a more modest 0.2%. Core was +0.22792% unrounded.
Over-the-year rates were +5.6% overall — largest increase since March
2010 — and +1.8% in core.
Not surprisingly, prices for both finished energy goods and
consumer foods lead the way in overall PPI increase, coming in at +3.3%
and +3.9% respectively.
Excluding energy, Feb PPI rose 1.1%, while if finished food prices
were omitted, increase would have also been +1.1%
Accounting for over 40% of the energy increase was gasoline prices,
up 3.7%. Also contributing were home heating oil (+14.6%), residential
natural gas (+3.2%) and residential electric power (+1.3%).
Surge in food prices was largest since a 4.2% increase reported in
November 1974. About 70% of the increase can be attributed to prices for
fresh and dry vegetables, up 48.7%. Higher prices for dairy and meats
also fueled the increase, up 4.1% and 3.4% respectively.
Within core, about 20% of increase due to price index for passenger
cars, up 0.6%. Jewelry up 4.6% and plastics +1.7% added to gain.
Intermediate PPI was +2.0% and crude +3.4%, showing continuing
pipeline pressures. In addition to energy, metals and feeds rose in
price.
These data indicate the economy is mending, as are exports, and are
perhaps a harbinger of massively surging prices. The bad start to the
year continues.
** Market News International Washington Bureau: (202) 371-2121 **
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