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The U.S. producer price index (PPI)—the prices that factories pay for their products’ components and raw materials—rose 0.8 percent in February, easing from January’s 1.2-percent gain.
The PPI is seen as a leading indicator of inflation’s direction.
The core PPI, which excludes the always-volatile costs of food and energy, edged up just 0.2 percent, a fraction of the median 0.9 percent economists had predicted in a Bloomberg survey.
Producers’ energy costs leaped 8.2 percent in February, food costs 1.9 percent.
The PPI for the service sector showed no increase last month.
However, the overall economy’s PPI annual rate of increase still rose slightly in February, reaching 10 percent.
Led by mining and manufacturing, U.S. industrial output grew by 1.2 percent over January, its best monthly rise since last October.
The gains were widespread across industries, although vehicle parts and production slipped, due to the continuing shortage of computer chips.
TREND FORECAST: Next month the headline will read: PRODUCER PRICE INDEX UP, INDUSTRIAL OUTPUT DOWN, as inflation continues to spike and demand for goods declines.