Producer Prices Unexpectedly Fell in February

Wholesale inflation unexpectedly dropped last month to the lowest annual rate in almost two years as prices for food and energy declined. 

The Labor Department’s Producer Price Index (PPI) fell 0.1%, while economists had been anticipating an increase. The January PPI was revised downward from a gain of 0.7% to 0.3%. For the year, the PPI was up 4.6%, a slide of 1.1 percentage points from January, and well below estimates. It hasn't been that low since March 2021.

Excluding prices for food, energy, and trade services, the index was up 0.2%, following the 0.5% rise the previous month.

Egg Prices Plummet

Final demand costs for goods lost 0.2%, with more than 80% of that decline attributable to the 36.1% plunge in egg prices. Overall food costs tumbled 2.2%. Energy prices were down 0.2%. Excluding those two, goods prices were 0.3% higher. 

Final demand prices for services fell 0.1%, the same as in January. They were led lower by a 0.8% slide in costs for trade services, and a 1.1% dip in prices for transportation and warehousing services. Without those included, services prices rose 0.3%.