Tuesday October 13th, 2015 10:27PM

US producer prices dip 0.1 percent in February

By The Associated Press
WASHINGTON (AP) -- The prices companies receive for their goods and services fell slightly in February, the latest sign that inflation is tame.

The producer price index, which measures price changes before they reach the consumer, dropped 0.1 percent in February, the Labor Department said Friday. That's the first decline since November. A sharp fall in the price markups by wholesalers and retailers pushed down the index.

Producer prices rose 0.9 percent from 12 months ago. That's the smallest 12-month increase since last May.

Wholesale food and energy prices increased, as did the cost of pharmaceuticals. Excluding the volatile categories of food, energy and retailer and wholesaler profit margins, core prices ticked up 0.1 percent.

The data also reflects the impact of aggressive discounting by clothing and shoe stores. Their profit margins fell 9.3 percent, the steepest on record. Gas stations and grocery stores also reduced their markups.

"The overall takeaway ... is that inflation pressures remain quiescent for the time being," Joseph LaVorgna, an economist at Deutsch Bank, said in a note to clients.

The figures underscore that inflation remains largely in check. Businesses have struggled to raise prices because of historically high levels of unemployment and meager wage growth. That's made it harder for consumers to pay more. And with unemployment high, those with jobs are less able to demand higher pay.

The index was expanded in January to include services and construction, in addition to goods. That's made it a more comprehensive measure.

The government will release its better-known consumer price index on Tuesday.

Low inflation has enabled the Federal Reserve to pursue extraordinary stimulus programs to try to boost economic growth. It has kept the short-term interest rate it controls at nearly zero for more than five years. It has also been purchasing bonds in an attempt to lower long-term interest rates to encourage more borrowing and spending.

The Fed is now trying to unwind some of that stimulus. It has cut its monthly bond purchases to $65 billion, from $75 billion in January and $85 billion last year.

Fed policymakers will meet next week and are expected to announce another $10 billion cut. Employers stepped up hiring last month, after harsh winter weather cut into job gains in December and January. Consumers also spent more at retailers in February after sharp drops in the previous two months.

The figures suggest the economy may be picking up as the weather improves. That may encourage the Fed to continue scaling back its stimulus. Still, Fed policymakers have expressed concern about the persistence of low inflation. If it remains below target, the Fed could extend its stimulus efforts.
© Copyright 2015
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Judge denies motions to move, delay Tsarnaev trial
Lawyers for Boston Marathon bombing suspect Dzhokhar Tsarnaev asked a federal appeals court Wednesday to overturn a judge's decision to not move his upcoming trial out of state.
10:02PM ( 9 months ago )
High court to adopt electronic filing of cases
The Supreme Court is belatedly developing an electronic filing system similar to those used in courts around the country, Chief Justice John Roberts said Wednesday in his annual end-of-year report.
7:57PM ( 9 months ago )
Storm brings snow, cold to West for New Year's
A blustery winter storm dumped snow and ice across the West on Wednesday, making driving treacherous in the mountains from California to the Rockies and forcing residents and party-goers in some usually sun-soaked cities to bundle up for a frosty New Year's.
5:19PM ( 9 months ago )
U.S. News
State DOT awards $48M contract for NE Ga. road project
The state Department of Transportation has awarded a $47.8 million contract for nine miles of work on a northeast Georgia road.
9:37AM ( 9 months ago )
Business News
In New Hampshire, Bush offers a 'conservative vision' of health care insurance for the future
MANCHESTER, N.H. (AP) — Republican presidential candidate Jeb Bush touted on Tuesday his plan to repeal and replace President Barack Obama's health care law with one that would increase tax credits fo...
9:02PM ( 1 hour ago )
5 arrested in North Ga. as part of national sex sting
The Hall County Sheriff's Office and several other local agencies assisted the Federal Bureau of Investigation and Georgia Bureau of Investigation in a sex sting, focused on human trafficking and internet crimes against children.
6:03PM ( 4 hours ago )
Last defendant in cab driver murder trial sentenced to life with parole
A Gainesville woman was sentenced to life in prison with the possibility of parole Tuesday, the last of five defendants in the murder or attempted robbery of a Gainesville cab driver.
5:15PM ( 5 hours ago )
Hall drug agents seize over eight ounces of meth, worth over $26,000
In a case that culminated with the arrests of three people on Monday, Hall County Multi Agency Narcotics agents seized methamphetamine worth an estimated $26,840 on the street.
3:18PM ( 7 hours ago )
Flowery Branch woman arrested for depositing counterfeit checks in Gwinnett
A Flowery Branch woman faces charges in Gwinnett County for allegedly depositing counterfeit checks in Norcross and Peachtree Corners.
2:21PM ( 8 hours ago )