Wholesale Inflation Heats Up as Goods Prices Jump
The Producer Price Index for final demand (also known as wholesale prices) jumped 0.7% over the month in February, up from the 0.5% increase in January and significantly above expectations. Over the year, producer prices climbed 3.4% in February, up from 2.9% in January and the largest 12-month increase since February 2025. Meanwhile, prices for final demand excluding foods, energy and trade services grew 0.5% over the month in February after rising 0.4% in January. Prices for these goods advanced 3.5% from February 2025.
Within final demand, prices for services rose 0.5% in February, after advancing 0.8% in January. Meanwhile, prices for goods soared 1.1% in February, the largest monthly increase since August 2023, after edging down 0.2% in January. Within the final demand services index, prices for traveler accommodation services surged 5.7%, accounting for about 20% of the February increase. Within the final demand goods index, prices for fresh and dry vegetables jumped 48.9%, accounting for over 20% of the February rise. At the same time, prices for industrial material handling equipment climbed 0.1% from January and 6.1% from February 2025.
Prices for processed goods for intermediate demand rose 1.6% in February, the largest monthly increase since August 2023, after staying the same in January. Within the index, prices for diesel fuel soared 13.9% after declining 1.1% in January. Meanwhile, prices for steel mill products and aluminum mill shapes advanced 3.0% and 5.7% from January and 20.9% and 39.1% from February 2025, respectively. Over the year, the index rose 4.0%, the largest annual increase since December 2022.
Meanwhile, prices for unprocessed goods for intermediate demand jumped 3.1% in February, the largest monthly increase since January 2025, after moving up 0.9% in January. The monthly rise was led by a 10.9% leap in natural gas prices, which surged 30.0% over the year. In contrast, prices for raw milk fell 9.1% in February and 33.3% from February 2025. Over the year, prices for unprocessed goods for intermediate demand decreased 1.7%, after declining 4.5% in January.