(RightIsRight.co) – Highlighting the ineffective administration of the White House regarding the economy for working-class Americans, a key gauge of inflation surged in February and signaled a faster inflation rate as the new year unfolds.
The Department of Labor reported a 0.6 % increase in the Produce Price Index (PPI) for the second month of 2024 which doubled January’s rate and surpassed Wall Street’s expectations.
The index saw a notable acceleration compared to last year, which increased by 1.6 %, up from January’s 0.9 % raise. This marked the fastest monthly gain since August and the highest yearly gain since September with the index rising in three out of the last four months.
Data from the Consumer Price Index (CPI) and the PPI for January and February suggested that the previous year’s slowdown in inflation has stalled. This uncertainty clouds the timing and extent of potential interest rate adjustments by the Federal Reserve this year.
Excluding food and energy prices, core PPI rose by 0.3 % for the month slightly lower than January’s 0.5 % but surpassing the consensus estimate of 0.2 %. Yearly core PPI increased by 2 %, exactly the 12-month gained recorded in January.
Moreover, excluding a category known as trade services, which measures retailer and wholesaler markups, prices rose by 0.4 % in February, down from January’s 0.6 %. Over the past 12 months, this so-called core-core PPI measure is up 2.8 %, up from January’s 2.6 %.
If February’s producer price inflation were to persist for the next 12 months prices would rise by 6.9 %.
Furthermore, it is important to note that the PPI measures price changes from the seller’s perspective and excludes sales or excise taxes, government subsidies, consumer-paid shipping costs and import prices.
The “final demand” aspect of the measure refers to sales to end-users such as government, household, business and foreign buyers rather than sales of components or materials used in production.
Earlier this week the Department of Labor reported a 0.4 % increase in the consumer price index for February along with a 3.2 % increase compared to the previous year.
Overall, the producer price index, often referred to as the “wholesale price index,” provides insights into inflation trends although it is important to note that it does not exclusively reflect wholesale prices or retail prices.
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