NATIONAL NEWS

US wholesale inflation fell last month on lower food costs

Mar 15, 2023, 5:39 AM | Updated: 7:14 am

Lumber is stored in the yard at East Coast Lumber, Tuesday, Feb. 28, 2023, in Hampstead, N.H. On We...

Lumber is stored in the yard at East Coast Lumber, Tuesday, Feb. 28, 2023, in Hampstead, N.H. On Wednesday, the Labor Department releases the producer price index for February, an indicator of inflation at the wholesale level that's closely monitored by the Federal Reserve. (AP Photo/Charles Krupa)
Credit: ASSOCIATED PRESS

(AP Photo/Charles Krupa)

WASHINGTON (AP) — Wholesale price increases in the United States slowed sharply last month as food and energy costs declined, a sign that inflationary pressures may be easing.

From January to February, the government’s producer price index fell 0.1%, after a 0.3% rise from December to January, which was revised sharply lower. Compared with a year ago, wholesale prices rose 4.6%, a big drop from the 5.7% annual increase in January.

A significant driver of last month’s wholesale inflation slowdown was a huge drop in the prices of eggs, which plummeted 36.1% just in February. Egg prices had previously surged after a widespread outbreak of avian flu.

Excluding volatile food and energy costs, so-called core wholesale prices were unchanged from January to February. The core measure can provide a better read of longer-term inflation trends.

Services prices at the wholesale level declined last month, slipping 0.1%. A substantial 1.1% drop in shipping costs pushed down overall services prices.

Energy prices dropped 0.2%, with the costs of heating oil, natural gas and diesel fuel all declining. Food prices dropped 2.2% from January to February, the third straight decline. That drop suggests that grocery store prices, which have been growing at a slower pace, could ease further in coming months.

The producer price data reflects prices charged by manufacturers, farmers and wholesalers, and it flows into an inflation gauge that the Federal Reserve closely tracks. It can provide an early sign of how fast consumer inflation will rise.

The figures follow a report Tuesday on consumer prices that showed that inflation is still rising faster than the Federal Reserve would prefer. Core prices, which exclude volatile food and energy costs and are seen as a better gauge of long-term inflation, rose 0.5% from January to February, the highest such rate since September. That is a far higher pace than is consistent with the Fed’s 2% annual target.

But the failure of two large banks since Friday has raised fears about financial instability and has complicated the Fed’s upcoming decisions about how high and how fast to raise interest rates to fight inflation. Despite chronically high inflation, some economists expect the central bank to suspend its year-long streak of interest rate hikes when it meets next week.

Many other analysts foresee only a modest quarter-point rate increase next week rather than the half-point Fed hike they had previously expected. The Fed, for now, may focus on boosting confidence in the financial system before it resumes its long-term drive to tame inflation.

That would be a sharp shift from just a week ago, when Chair Jerome Powell suggested to a Senate committee that if inflation didn’t cool, the Fed could raise its benchmark interest rate by a substantial half-point at its meeting March 21-22. When the Fed raises its key rate, it typically leads to higher rates on mortgages, auto loans, credit cards and many business loans.

The next day, testifying to a House committee, Powell cautioned that no final decision had been made about what the Fed would do at the March meeting.

National News

Associated Press

Ex-CEO of Nevada-based health care company Ontrak convicted of $12.5 million insider trading scheme

LOS ANGELES (AP) — The former CEO and chairman of Ontrak, a publicly traded health care company based in Nevada, was found guilty Friday of a multimillion-dollar insider trading scheme. A federal jury in Los Angeles convicted Terren Scott Peizer, a resident of Puerto Rico and Santa Monica, California, of one count of securities fraud […]

1 hour ago

Associated Press

Lockheed Martin subsidiaries reach $70 million settlement for claims they overcharged Navy for parts

STRATFORD, Conn. (AP) — Two Lockheed Martin subsidiaries have agreed to pay the federal government $70 million for overcharging the Navy for aircraft parts, the U.S. Department of Justice announced Friday. The federal agency says Sikorsky Support Services, based in Stratford, Connecticut, and Derco Aerospace, headquartered in Milwaukee, Wisconsin, knowingly entered into an improper subcontract […]

2 hours ago

Associated Press

Man accused in killing and kidnappings in Louisiana waives extradition

JACKSON, Miss. (AP) — A man arrested in the slaying of a Louisiana woman and abduction of her two daughters and subsequent death of one of them waived extradition Friday in federal court in Mississippi, clearing the way for his return to Louisiana to face trial. During his court appearance in Jackson, Daniel Callihan, 36, […]

2 hours ago

Associated Press

88-year-old Montana man who was getaway driver in bank robberies sentenced to 2 years in prison

BILLINGS, Mont. (AP) — An 88-year-old Montana man has been sentenced to two years in a federal prison medical facility for being the getaway driver in two bank robberies in Billings last summer, the U.S. Attorney’s Office in Montana said. The man was sentenced Thursday after pleading guilty in February to two counts of bank […]

3 hours ago

Associated Press

Guest lineups for the Sunday news shows

WASHINGTON (AP) — ABC’s “This Week” — Sen. Elizabeth Warren, D-Mass. ___ NBC’s “Meet the Press” — Mitch Landrieu, national co-chair of President Joe Biden’s reelection campaign; Gov. Kristi Noem, R-S.D. ___ CBS’ “Face the Nation” — Gov. Michelle Lujan Grisham, D-N.M.; former national security adviser Robert C. O’Brien; former Deputy CIA Director Michael Morell. […]

3 hours ago

Associated Press

At least 6 heat-related deaths reported in metro Phoenix so far this year as high hits 115 degrees

PHOENIX (AP) — At least six people have died from heat-related causes this year so far in sizzling metro Phoenix, where the temperatures this week hit 115 degrees Fahrenheit (46 Celsius), Arizona’s Maricopa Department of Public Health reported this week. Another 87 deaths are under investigation for possible heat-related causes through last Saturday, public health […]

5 hours ago

US wholesale inflation fell last month on lower food costs