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Producer Price Index rose 0.5% in February, ex Fd & Engy up 0.2%
The Producer Price Index for final demand increased 0.5 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This rise followed advances of 1.3 percent in January and 0.3 percent in December. (See table A.) On an unadjusted basis, the final demand index moved up 2.8 percent for the 12 months ended in February, the largest increase since rising 3.1 percent for the 12 months ended October 2018.
Most of the February advance in prices for final demand can be traced to a 1.4-percent rise in the index for final demand goods. Prices for final demand services increased 0.1 percent.
Prices for final demand less foods, energy, and trade services moved up 0.2 percent in February, the tenth consecutive advance. For the 12 months ended in February, the index for final demand less foods, energy, and trade services rose 2.2 percent, the largest increase since a 2.4-percent advance for the 12 months ended May 2019.
Final demand goods: The index for final demand goods rose 1.4 percent in February, the same as in January. Over two-thirds of the broad-based February increase can be traced to prices for final demand energy, which climbed 6.0 percent. The indexes for final demand goods less foods and energy and for final demand foods advanced 0.3 percent and 1.3 percent, respectively.
Product detail: Forty percent of the February increase in the index for final demand goods is attributable to gasoline prices, which jumped 13.1 percent. The indexes for diesel fuel, beef and veal, basic organic chemicals, residential electric power, and chicken eggs also moved higher. Conversely, prices for fresh and dry vegetables fell 16.7 percent. The indexes for iron and steel scrap and for distilled and bottled liquor (except brandy) also declined. (See table 4.)
Final demand services: The index for final demand services inched up 0.1 percent in February after increasing 1.3 percent in January. Two-thirds of the February advance in prices for final demand services can be traced to a 1.1-percent rise in the index for final demand transportation and warehousing services. Margins for final demand trade services edged up 0.1 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) The index for final demand services less trade, transportation, and warehousing was unchanged.
Product detail: A 3.6-percent increase in the index for transportation of passengers (partial) was a major factor in the February advance in prices for final demand services. The indexes for securities brokerage, dealing, and investment advice; machinery and equipment parts and supplies wholesaling; health, beauty, and optical goods retailing; and hardware, building materials, and supplies retailing also moved higher. In contrast, margins for apparel, jewelry, footwear, and accessories retailing decreased 6.5 percent. The indexes for traveler accommodation services, machinery and vehicle wholesaling, and portfolio management also declined.
Posted: March 12, 2021 Friday 08:30 AM