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Posted March 13, 2025 at 10:15 am
U.S. producer prices unexpectedly stagnated in February, while core inflation posted a rare contraction, reinforcing hopes that cost pressures may be easing despite lingering concerns over trade tariffs.
The Producer Price Index (PPI) remained flat on a monthly basis in February, a sharp deceleration from January’s upwardly revised 0.6% gain and below expectations of a 0.3% increase.
Core PPI, which excludes food and energy, fell 0.1% in February, marking its first monthly decline since July 2024. This came after January’s figure was revised higher to a 0.5% gain.
On a year-over-year basis, headline producer inflation eased to 3.2%, down from January’s upwardly revised 3.7%, while core PPI slowed to 3.4%, from a revised 3.8% in the previous month.
The weaker-than-expected producer inflation report follows Friday’s consumer price index data, which also came in softer than anticipated, strengthening the case for Federal Reserve rate cuts later this year.
The muted headline figure masked significant divergences across categories. Food prices surged 1.7%, largely driven by an extraordinary 53.6% spike in egg prices.
Other contributors to the increase included pork, fresh and dry vegetables, electric power, tobacco products, and carbon steel scrap.
Yet, gasoline prices fell 4.7%, exerting downward pressure on the overall index.
Meanwhile, the index for final demand services declined 0.2%, the steepest drop since July 2024, suggesting cooling inflationary pressures in service-related sectors.
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Originally Posted March 13, 2025 – US Producer Inflation Stalls In February As Services Costs Drop, Egg Prices Skyrocket
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