16 March 2011 16:17 [Source: ICIS news]
WASHINGTON (ICIS)--US producer prices shot up by 1.6% in February from January, the Department of Labor said on Wednesday, the highest pace of price gains in 20 months and the eighth straight month of increases.
February’s wholesale prices increase was the sharpest since June 2009 when it hit 1.9%, according to the department.
Among commodities contributing to the price gains were organic chemicals, which rose by 4.5% last month compared with January, and plastic resins, which edged up by 0.5%.
Overall, the department said that February’s advance in the producer price index (PPI) was largely the result of sharp increases in fuels and foods.
Energy products, including gasoline, diesel fuel, home heating oil and electric power, saw gains of 3.3% in February, with a 3.7% one-month gain in gasoline prices accounting for 40% of the energy products’ boost.
Wholesale prices for food products also were up sharply last month, rising by 3.9% from January’s levels.
With energy and food products backed out of the overall figures, the department said that the so-called core index for producer prices rose by only 0.2%.
But that 0.2% gain in the core index for February was the third consecutive monthly increase, the department noted.
Economists and policymakers pay careful attention to movements in wholesale prices because they often foretell inflationary price increases at the retail level.
While US prices have been edging up and overall inflation has begun to inch up, the Federal Reserve Board said on Tuesday that the pace of inflation was not worrisome and that recent gains in energy prices likely would be transitory.
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