|
Producer prices drop
|
 |
March 12, 1999: 9:11 a.m. ET
Wholesale prices fall 0.4%, taking economists by surprise
|
NEW YORK(CNNfn) - Wholesale prices dropped 0.4 percent in February, while the core inflation rate remained unchanged, the Labor Department said Friday.
Economists expected the overall producer price index to drop 0.1 percent. The core rate, a key weathervane of inflation, had been expected to rise slightly.
The decline follows a 0.5 percent rise in the previous month's overall PPI. The core rate fell 0.1 percent in January.
"It's very encouraging to see a negative PPI. I think it helps us all believe inflation is not going to accelerate," Susan Hering, chief economist at Carr Futures, told CNNfn's "Before Hours."
Food prices saw their sharpest decline since 1982, dropping 1.4 percent in February. Energy prices slipped 1 percent.
The treasury market took the data in stride, jumping shortly after the 8:30 a.m. ET release. The 30-year bond gained 11/32 for a yield of 5.55 percent.
Hering said she expects inflation to stay at bay for a little longer.
"I think generally it's hard to expect a really rapid acceleration of inflation in the U.S. because inflation expectations have fallen so low here. People just aren't in the mindset to expect prices to rise sharply," she said.
However, the economist voiced some concern about commodity prices.
"The upturn in crude oil prices and some other commodities prices… raises some question about whether or not we are going to see a little more inflation at the crude level, and that could be a little upsetting to the (Federal Reserve) and to markets," she said. 
|
|
|
|
|
|
Department of Labor
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
