fair.png
Friday July 30th, 2021 7:23PM

Spiking energy leads wholesale prices up 0.5% in February

By The Associated Press
Related Articles
  Contact Editor

WASHINGTON (AP) — Energy prices continued to rocket higher in February, though overall wholesale prices moderated after a record jump in January.

The Labor Department's producer price index, which measures inflation before it reaches consumers. increased by 0.5% last month following a record jump of 1.3% the month before.

Price increases slowed despite a 6% surge in energy last month, which followed a 5.1% jump in January, the Labor Department said Friday.

Over the past year, wholesale prices are up 2.8%, the largest 12-month gain at the wholesale level in more than two years. Core inflation, which excludes volatile food and energy, rose 2.5% over the past 12 months.

Both readings are above the Federal Reserve's 2% target for inflation. Some economists fear that inflation, which has been dormant over the past decade, could begin to rise under the extra demand generated by the government's new $1.9 trillion stimulus package signed into law Thursday.

Others disagree, pointing out that there are 9.5 million fewer jobs in the American economy than there were before the pandemic hit a year ago, and argue that unemployment will keep a lid on inflation.

“While underlying price pressures will inevitably heat up amid a healthier, fiscally stimulated economy ... we believe inflation is unlikely to spiral out of control,” said Mahir Rasheed, a senior economist with Oxford Economics. “The Fed should therefore look through the transitory spike and stick to a very dovish policy.”

Fed policymakers meet next week and the expectation is that they will keep their benchmark policy rate unchanged at a record low of zero to 0.25%.

Fears of higher inflation have driven interest rates on bonds higher in recent weeks but Fed officials including Chairman Jerome Powell have insisted that while inflation may jump temporarily this spring as the economy re-opens, they see no signs of sustained price increases.

For February, food costs at the wholesale level rose 1.3%, the biggest monthly gain since September. A total of 40% of the rise in goods prices in February was attributed to a 13.1% jump in gasoline prices.

The jump in food costs was driven by higher prices for beef and eggs while the cost of fresh and dry vegetables fell by 16.7%.

Earlier this week, the U.S. reported that consumer prices rose 0.4% in February, the biggest gain in six months, also because of rising energy prices. However, core inflation at the consumer level posted a much smaller 0.1% gain.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy
© Copyright 2021 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Memo banning Afghan girls singing prompts #IAmMySong protest
An Afghan education ministry memo banning girls 12 years old and older from singing at public school functions is causing a social media stir
9:58AM ( 8 minutes ago )
Global rise in childhood mental health issues amid pandemic
Doctors say the impact of the coronavirus pandemic on the mental health of children is alarming and plain to see
9:52AM ( 14 minutes ago )
Spiking energy leads wholesale prices up 0.5% in February
The rise in wholesale prices moderated a bit in February after a record increase in January with both months being hit with higher energy prices
9:49AM ( 17 minutes ago )
Associated Press (AP)
Hungary emerges as an EU vaccination star amid surging cases
Hungary has emerged as a European Union leader in COVID-19 vaccinations thanks to its strategy of procuring jabs from outside the bloc
9:24AM ( 42 minutes ago )
Journalists' group: 65 media workers killed in 2020
The International Federation of Journalists said 65 journalists and media workers were killed while doing their jobs last year
8:54AM ( 1 hour ago )
Wholesale prices rise 0.5% in February as energy costs jump
The rise in wholesale prices moderated a bit in February after a record increase in January with both months being hit with higher energy prices
8:53AM ( 1 hour ago )
AP Business
World shares mixed after stimulus lifts Dow, S&P to records
Stocks are mixed in Europe and Asia after broad gains lifted several major indexes to all-time highs on Wall Street
3:56AM ( 6 hours ago )
UK GDP shrinks 2.9% amid COVID lockdown; Brexit cuts exports
The British economy shrank 2.9% in January as the nation was hit by a new round of coronavirus restrictions and Brexit slashed exports to the European Union
3:33AM ( 6 hours ago )
Asian shares mixed after stimulus lifts Dow, S&P to records
Stocks are mixed in Asia after broad gains lifted several major indexes to all-time highs on Wall Street
1:57AM ( 8 hours ago )
AP Business - Economy
Global rise in childhood mental health issues amid pandemic
Doctors say the impact of the coronavirus pandemic on the mental health of children is alarming and plain to see
9:52AM ( 14 minutes ago )
Tech stocks sink in early trading as bond yields climb again
Stocks are off to a mixed start on Wall Street as another sharp rise in bond yields unsettled investors
9:41AM ( 24 minutes ago )
Newspaper: China to soon try 2 Canadians on spying charges
A Communist Party newspaper says China will soon begin trials for two Canadians arrested in apparent retaliation for Canada's detention of a senior executive for Chinese communications giant Huawei Technologies
9:40AM ( 26 minutes ago )
The Latest: Poll: People of color bear virus economic brunt
A new poll from The Associated Press-NORC Center for Public Affairs Research finds that Black and Hispanic Americans are more likely than white Americans to have experienced job and other income losses due to the coronavirus pandemic
9:37AM ( 28 minutes ago )
Case of UK woman who vanished on way home stirs grief, anger
The suspected abduction and murder of a young London woman as she walked home has dismayed Britain and revived a painful question: Why are women too often not safe on the streets
9:37AM ( 29 minutes ago )