The Producer Price Index (PPI) rose again in February, jumping 1.6 percent compared to the same time last year. January’s jump in the PPI was also revised up from 0.9 percent to 1.0 percent. Core PPI — annualized — rose 2 percent over the same period, on par with the 2 percent increase seen in January.
Last month, government data released by the Bureau of Labor Statistics indicated an acceleration in inflation. The Personal Consumption Expenditures (PCE) Index registered a 0.3 percent jump from the prior month. The increase in the PCE Index was 2.4 percent when annualized. The Federal Reserve closely monitors both the PCE Index and PPI as more accurate measures of inflation.
Earlier this week, President Joe Biden’s Treasury Secretary, Janet Yellen, said she regretted comments she made suggesting inflation was just transitory. “I regret saying it was transitory. It has come down. But I think transitory means a few weeks or months to most people,” the Treasury Secretary said.
The return of inflation fears is likely to push off further any interest rate cuts by the Federal Reserve. Jerome Powell, the central bank’s chairman, has already indicated that a rate cut is unlikely before the 2024 presidential election.
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