Reflecting another jump in energy prices, the Labor Department released a report on Friday showing U.S. producer prices increased in line with economist estimates on the month of February.
The Labor Department said its producer price index for final demand climbed by 0.5 percent in February after surging up by 1.3 percent in January. The price growth matched expectations.
The increase in producer prices was partly due to a continued spike in energy prices, which shot up by 6.0 percent in February after soaring by 5.1 percent in January. Gasoline prices skyrocketed by 13.1 percent.
Food prices also showed a significant increase, jumping by 1.3 percent in February after edging up by 0.2 percent in the previous month.
Excluding prices for food, energy, and trade services, core producer prices crept up by 0.2 percent in February following a 1.2 percent jump in January. Core prices also rose in line with estimates.
The uptick in core prices was partly due to a continued surge in prices for transportation and warehousing services, which climbed by 1.1 percent in February after increasing by 1.3 percent in January.
The report also showed the annual rate of growth in producer prices spiked to 2.8 percent in February from 1.7 percent in January.
Core producer prices in February were up by 2.2 percent compared to the same month a year ago, reflecting an uptick from the 2.0 percent growth in January.
“While underlying price pressures will inevitably heat up amid a healthier, fiscally stimulated economy and strong base effects, we believe inflation is unlikely to spiral out of control,” said Mahir Rasheed, Associate U.S. Economist at Oxford Economics.
Rasheed added, “The Fed should therefore look through the transitory spike and stick to a very dovish policy stance.”
On Wednesday, the Labor Department released a separate report showing consumer prices also increased in line with economist estimates in the month of February.
The Labor Department said its consumer price index climbed by 0.4 percent in February after rising by 0.3 percent in January. The increase in prices matched expectations.
Gasoline prices led the way higher once again, surging up by 6.4 percent in February following a 7.4 percent spike in January.
Excluding food and energy prices, core consumer prices inched up by 0.1 percent in February after coming in unchanged for two straight months. Economists had expected core prices to rise by 0.2 percent.
On an annual basis, consumer price growth accelerated to 1.7 percent in February from 1.4 percent in January but core price growth slowed to 1.3 percent from 1.4 percent.