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DAVID ZALUBOWSKI/ AP
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Rising energy prices are putting a damper on the slowing inflation narrative as wholesale costs rose 0.6% in February, double the expectation, the Bureau of Labor Statistics reported on Thursday.
On an annual basis, the producer price index increased by 1.6%, well above the 1.2% forecast and the largest year-over-year gain since September.
“Nearly 70 percent of the broad-based rise in February can be attributed to the index for final demand energy, which jumped 4.4 percent,” the release said.
Excluding energy and food prices, the index rose 0.4% in February, double what economists expected, and 2.8% for the 12-month period. Expectations were for a gain of 1.9%.
“PPI came in stronger than expected driven by higher insurance costs among other categories. Not a breakout to the upside, but declining trend is leveling off,” Kathy Jones, chief fixed income strategist for the Schwab Center for Financial Research, posted on social media.