By Lucia Mutikani
WASHINGTON, March 15 (Reuters) – U.S. producer prices (PPI) rose sharply in February as the cost of goods such as gasoline rose, and further rises are expected following Russia’s war against Ukraine, which has made prices more expensive. oil and other raw materials.
Tuesday’s Labor Department report offered further evidence that inflation will remain uncomfortably high in coming months, despite subdued underlying price pressure at factory gates last month.
The Federal Reserve is expected to raise interest rates on Wednesday for the first time in just over three years, with inflation running well above the US central bank’s 2% target. Economists forecast up to seven hikes this year.
“We expect the March PPI to show larger gains as commodity prices rise and global trade disruptions widen,” said Will Compernolle, senior economist at FHN Financial in New York.
“For consumer prices to slow down, companies will first have to deal with shocks from the Russian invasion and new lockdowns in the heart of China’s most productive regions.”
The producer price index for final demand rose 0.8%, after accelerating 1.2% in January. The prices of the goods are soared and 2.4%, the biggest gain of December 2009, after rising 1.5% in January.
A 14.8% increase in wholesale gasoline prices accounted for almost 40% of the increase in goods prices. Gasoline had risen and 3.3% in total.
In the 12 months to February, the PPI rose and 10% after an increase similar to that. Last month’s increase was in line with economists’ expectations.
The data does not include the increase in the prices of oil and other raw materials, such as wheat, after the Russian invasion of Ukraine on February 24.
Despite a recent moderation in oil prices, inflation is likely to remain red-hot as a resurgence of COVID-19 infections in China, a major source of inputs for US factories, exerts more Pressure on supply chains.
Excluding the volatile components of food supply, energy and commercial services, producer prices rose 0.2% in February. The so-called basic PPI had warned and 0.8% January.
In the month of February 12, the PPI fell by 6.6% compared to the rise of 6.8% in January.
(Reporting by Lucia Mutikani; Edited in Spanish by Javier López de Lérida)