Wholesale costs in the U.S. rose more than forecast in February, led by food prices at a more than three-decade high and a surge in energy.
The producer-price index climbed 1.6 percent from the prior month, the most since June 2009, Labor Department figures showed today in Washington. The median projection in a Bloomberg News survey was for a 0.7 percent gain. The so-called core measure, which excludes volatile food and energy costs increased 0.2 percent, matching forecasts.
The cost of raw materials has risen further as expanding economies in Asia and Latin America lift demand, and crude oil has been pushed up by turmoil in the Middle East. Even so, firms have limited scope to raise prices to shield profits, allowing the Federal Reserve yesterday to maintain monetary easing to spur growth while citing “subdued” underlying inflation.
“Companies hardly have pricing power,” Stephen Gallagher, chief U.S. economist at Societe Generale SA in New York, said before the report. “Underlying inflation is contained.”
Estimates for producer prices were based on forecasts from 72 economists in a Bloomberg News survey. Projections ranged from a drop of 0.1 percent to a gain of 1.1 percent, after a 0.8 percent rise in January.
Food, Energy
Wholesale prices excluding volatile food and energy costs were projected to rise 0.2 percent from the prior month, the survey showed. The core index rose 0.5 percent in January.
Compared with a year earlier, companies paid 5.6 percent more for goods last month after a 3.6 percent rise in January.
Core wholesale prices climbed 1.8 percent in the 12 months ended in February, in line with the median forecast in the Bloomberg survey and following a 1.6 percent year-over-year gain the prior month.
The cost of food increased 3.9 percent, the most since November 1974, while energy prices rose 3.3 percent led by a 15 percent jump in home heating oil.
Expenses for intermediate goods rose 2.0 percent from the prior month, the biggest gain since July 2008.
Prices of crude goods increased 3.4 percent.
El Segundo, California-based Mattel Inc. (MAT) is among companies that plan to try to raise prices to cushion their profits. The world’s largest toymaker said the increases would be across all its brands.
The producer-price index climbed 1.6 percent from the prior month, the most since June 2009, Labor Department figures showed today in Washington. The median projection in a Bloomberg News survey was for a 0.7 percent gain. The so-called core measure, which excludes volatile food and energy costs increased 0.2 percent, matching forecasts.
The cost of raw materials has risen further as expanding economies in Asia and Latin America lift demand, and crude oil has been pushed up by turmoil in the Middle East. Even so, firms have limited scope to raise prices to shield profits, allowing the Federal Reserve yesterday to maintain monetary easing to spur growth while citing “subdued” underlying inflation.
“Companies hardly have pricing power,” Stephen Gallagher, chief U.S. economist at Societe Generale SA in New York, said before the report. “Underlying inflation is contained.”
Estimates for producer prices were based on forecasts from 72 economists in a Bloomberg News survey. Projections ranged from a drop of 0.1 percent to a gain of 1.1 percent, after a 0.8 percent rise in January.
Food, Energy
Wholesale prices excluding volatile food and energy costs were projected to rise 0.2 percent from the prior month, the survey showed. The core index rose 0.5 percent in January.
Compared with a year earlier, companies paid 5.6 percent more for goods last month after a 3.6 percent rise in January.
Core wholesale prices climbed 1.8 percent in the 12 months ended in February, in line with the median forecast in the Bloomberg survey and following a 1.6 percent year-over-year gain the prior month.
The cost of food increased 3.9 percent, the most since November 1974, while energy prices rose 3.3 percent led by a 15 percent jump in home heating oil.
Expenses for intermediate goods rose 2.0 percent from the prior month, the biggest gain since July 2008.
Prices of crude goods increased 3.4 percent.
El Segundo, California-based Mattel Inc. (MAT) is among companies that plan to try to raise prices to cushion their profits. The world’s largest toymaker said the increases would be across all its brands.
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