The Producer Price Index (PPI) remained stable from January to February, with the annual rate decreasing from 3.7% to 3.2%. This was aided by a 1.2% reduction in energy prices. Excluding the more volatile food and energy sectors, the Core PPI slipped by 0.1% month over month, while the year-over-year rate fell from 3.8% to 3.4%. These figures were all below expectations.
What’s the bottom line?
PPI data is crucial as it impacts the Personal Consumption Expenditures (PCE) index, which is theFederal Reserve’s preferred inflation gauge. While the overall PPI showed cooler results than predicted, an analysis highlights increases in significant areas, such as healthcare, that may influence the PCE. The upcoming PCE report set for March 28 will be worth watching to assess any hotter-than-expected outcomes, or whether other factors will mitigate these increases.