Prices paid to U.S. producers advanced strongly in February amid higher cost of goods underlining higher inflationary pressure that has reiterated the anticipation for Federal Reserve to act on by raising rates by 25 basis this week.
Producer price index (PPI) for final demand has increased by 10% on an annual basis and 0.8% on a monthly count, according to data by Labor Department. January figure was revised upward by 1.2% on a monthly count.
Bloomberg surgery showed 10% increase year-over-year and 0.9% month-over-month.
U.S. two year treasury yield extended its decline while S&P 500 advanced on lower than anticipated monthly count.
The PPI figure reflects biggest monthly gain since 2009 and mainly attributed to energy prices, with partial increase from food prices.
This implies the FED would be aggressive in taming down inflation as next calendar inflation number release is anticipated to be much higher due to higher energy and food prices amid Russia-Ukraine war, that has added to strained economic growth globally.
The core PPI also increased 0.2% from on a monthly count and 8.4% year-over-year.
