Wholesale prices paid by producers in the United States registered a 10% annual increase in February, according to the Statistics Office of the Department of Labor in Washington on Tuesday.
The Producer Price Index (PPI) rose 0.8% month-on-month and 10% compared to a year ago.
The monthly value was better than expected since it was estimated that prices would increase by 0.9%, according to a survey by the Bloomberg agency of a group of economists. However, it is the fourth consecutive month where the annual figure exceeds 9%.
The increase in rates this Wednesday is expected to be at least 25 basis points, although it is unknown what the Fed’s position will be for the rest of the year
For reference, just a year ago, wholesale inflation in the United States only totaled 3% per year and 0.7% per month. In this month’s index, goods were the big drivers of the same, registering a 2.4% monthly increase, the strongest advance since the series began in December 2009.
Both energy and food prices posted strong gains, with the former accounting for two-thirds of the overall rise. In this sense, if the volatile values of energy and food are excluded, the index totals 0.2% and 8.4% monthly and annually, respectively.
On the other hand, in services, prices remained without major changes compared to January, the first month without increases since the end of 2020.
The index published this Tuesday adds one more reason to the argument of the Federal Reserve (FED) to increase its reference interest rates, whose announcement is expected this Wednesday at the end of the entity’s monthly monetary meeting.
The increases in final consumer prices published last Friday, registered the highest rise in 40 years in February
The increase in rates this Wednesday is expected to be at least 25 basis points, although it is unknown what the Fed’s position will be for the rest of the year, since an overly aggressive policy could lead to greater possibilities of recession in the US economy.
Some Wall Street entities even foresee a total of 6 or 7 hikes during the year, something that will depend, among other factors, on the evolution of the inflation index.
Wholesale inflation is taken into account because it is expected that part of the increases in the prices paid by producers will be passed on to the final consumer whose price index, published last Friday, registered the highest rise in 40 years in February.
