WASHINGTON, D.C.: US wholesale prices fell modestly in February, weighed down in part by another fall in energy prices, but there were signs of inflation building, according to government data published on Tuesday.
The Labor Department reported its producer price index fell 0.2 percent in February, after edging up 0.1 percent in January.
A large part of last month’s decline was a 3.4 percent drop in energy prices. Gasoline prices tumbled 15.1 percent in February.
Excluding food, energy and trade services, producer prices rose 0.1 percent, after 0.2 percent increases in January and December, and were 0.9 percent higher than a year ago.
Compared with a year ago, the overall PPI was unchanged, the first time since January 2015 that prices held steady.
“The underlying trend at the core level appears to be up modestly at least. The core readings had been slowing on a 12-month-change basis, but that slowing seems to have ended,” said Jim O’Sullivan, chief US economist at High Frequency Economics.
The inflation data came as the Federal Reserve opens a two-day monetary policy meeting.
The central bank is widely expected to leave its benchmark interest rate unchanged, after lifting it in December for the first time in nine years.
Moody’s Analytics analyst Ryan Sweet said the acceleration in core inflation offers support to the Fed’s forecast in December that further rate hikes were coming this year.