United States wholesale prices rose far more than expected in February due to a large increase in service prices, with prices for vegetables and gasoline products also climbing.
The producer price index increased 0.7% during February and 3.4% annually, the Bureau of Labor Statistics (BLS) said. Dow Jones-polled economists had projected an 0.3% increase.
The spike was largely due to rising prices for wholesale services. “More than half of the February rise in prices for final demand can be attributed to a 0.5-percent advance in the index for final demand services,” according to the BLS.
Among services, trade prices grew 0.4% in February, while transportation and warehousing increased 0.5%.
The report follows the February Supreme Court ruling that many of President Donald Trump’s tariffs were unlawful, though the administration has now imposed blanket 15% tariffs under a different statute.
Prices for wholesale goods were up 1.1%, or 0.3% excluding food and energy. “Over 20 percent of the February rise in the index for final demand goods is attributable to a 48.9-percent jump in prices for fresh and dry vegetables,” per the BLS.
The price of wholesale diesel and gasoline also increased, the agency said. February’s report came largely before the U.S. war against Iran, which began at the end of the month and has sent oil prices up by more than 40%.
The Federal Reserve left interest rates unchanged at its meeting today. It is likely to cut rates once more in this cycle, potentially in June, Westpac analysts project.
