US producer price index (PPI), a gauge to measure pipeline costs for raw, intermediate and finished goods, accelerated at a faster-than-expected pace in February, reiterating the market of sticky inflation and erasing hopes for early rate cuts by the Federal Reserve.
Wholesale prices rose to 1.6% YoY in February, higher than a 1.2% expected rise by economists and 0.9% in January. On a monthly basis, PPI jumped 0.6%, compared to 0.3% expected and also a 0.3% increase in January.
Meanwhile, core PPI was 2.0%, higher than a 1.9% increase expected by economists.
Earlier this week, the consumer price index for the U.S. increased 3.2% year over year in February, according to data released Tuesday by the Bureau of Labor Statistics. It was slightly higher than the 3.1% expected by economists and the pace it set in January. On a monthly basis, the consumer price rose 0.4% as expected.
Meanwhile, core inflation, which excludes the volatile food and energy prices, rose 3.8% YoY, which was down from 3.9% in January, but higher than a 3.7% rise expected by economists.
On a monthly basis, the core consumer price rose 0.4%, compared to 0.3% expected.
This indicates that inflation is now on a rise and should companies pass on these higher costs to consumers, things could turn out worse than the market had anticipated.
