Two Major Inflation Markers Lower Than Expected

Two major markers of inflation came in lower than expected this week despite tariffs against China and other concerns that prices would increase.

The U.S. Bureau of Labor Statistics released its Producer Price Index Thursday, a key marker of inflation, which showed that PPI did not rise last month but remained flat despite rising 0.5% in December and 0.6% in January.

PPI has risen 3.2% overall in the last year. 

The avian flu outbreak among chickens has kept egg prices high for months now.

“Two-thirds of the February increase in the index for final demand goods is attributable to prices for chicken eggs, which jumped 53.6 percent,” BLS said. “The indexes for pork, fresh and dry vegetables, electric power, tobacco products, and carbon steel scrap also moved higher. Conversely, prices for gasoline declined 4.7 percent. The indexes for processed young chickens and for primary basic organic chemicals also decreased.”

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The PPI data comes just after the Consumer Price Index for February rose just 0.2% last month, part of a 2.8% rise over the last 12 months, as The Center Square previously reported.

The decline in both CPI and PPI was significantly impacted by a decrease in gasoline prices.

BLS breaks pricing into goods and services.

“Over 40 percent of the February decline in prices for final demand services is attributable to margins for machinery and vehicle wholesaling, which decreased 1.4 percent,” BLS said of its PPI data.

Syndicated with permission from The Center Square.