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Friday, March 13, 2015

Producer Prices Fell in February

Producer prices dropped in February, falling by 0.5% according to the U.S. Bureau of Labor Statistics. This was the eighth consecutive monthly decrease. The decline in final demand prices was primarily due to a 0.5% decrease in the index for final demand services, the largest decline since the inception of the index in December 2009. Prices for final demand goods dropped by 0.4% for the month. On a yearly basis, producer prices dropped 0.6%, turning negative for the first time since the aftermath of the financial crisis.



The fall in final demand services can be partially attributed to a decrease in retail margins for fuels and lubricants, which dropped by 13.4%. Machinery, equipment, parts and supplies wholesaling also fell, while prices for healthcare services such as inpatient care increased.

Food prices fell by 1.6% in February, the third consecutive month of decline and the largest monthly drop in over a year. A large portion of the decline can be traced to the index for fresh and dry vegetables, which dropped by 17.1%.

Read the BLS report.

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