US wholesale prices rise fastest in 18 months
US producer prices surged in February at their fastest pace in just over 18 months, pointing to a build-up in pipeline inflation pressures from soaring food and energy costs.
The US Labor Department says its seasonally-adjusted index for prices paid at the farm and factory gate jumped 1.6 per cent, the largest increase since June 2009, after rising 0.8 per cent in January.
That was more than double economists’ expectations for an 0.7 per cent rise last month.
In the 12 months to February producer prices increased 5.6 per cent, the biggest rise since March, after advancing 3.6 per cent in January.
The report came a day after the Federal Reserve said it expected the upward inflation pressure from energy and other commodities to prove transitory but that it would keep a close eye on inflation and inflation expectations.
Economists said given the huge amount of slack in the economy, they did not expect the strong producer prices to pass through to consumers any time soon.
“Many of these things do not have much bearing on the consumer price index… but they are certainly reason for the Fed’s vigilance on commodity prices,” said David Resler, chief economist at Nomura Securities International in New York.