WASHINGTON – U.S. producer prices fell for the fourth consecutive month in February, highlighting a lack of inflationary pressure in the economy, according to Labor Department data released Friday.
The producer price index fell 0.5%, led by a 1.6% decline in food prices. Unlike in previous months, energy prices were flat as the oil market stabilized following a rapid price decline since June. In January a steep 10.3% drop in energy prices had pulled the PPI down 0.8%.
Core PPI, stripping out food and energy, fell 0.5% in February.
The fall in overall producer prices was unexpected; analysts had estimated a 0.3% increase, and a 0.1% gain in core PPI.
The Producer Price Index for iron and steel scrap plummeted 19.3% in February, compared with January, BLS data show.
The Producer Price Index for iron and steel scrap plummeted 19.3% in February, compared with January, BLS data show. http://t.co/J6flK7dLyU— Modern Metals (@ModernMetalsMag) March 13, 2015
Year-over-year, producer prices were down 0.6% in February.
Despite the lack of upward pressure on prices, the Federal Reserve, which opens a two-day monetary policy meeting Tuesday, expects that longer-term inflation eventually will rise toward its 2.0% target. The Fed has said the current weakness in prices is largely due to transitory factors, such as falling oil prices.
The Fed's preferred inflation measure, the personal consumption expenditures price index, rose just 0.2% over the 12 months to January.
The consumer price index, which typically runs a bit weaker than PCE prices, was down 0.1% in January from a year earlier, the first year-over-year decline since October 2009.
Copyright Agence France-Presse, 2015