Producer Price Index Falls, Pointing to Lower Inflation

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By nytimes

United States producer prices fell in February for a fourth straight month, pointing to tame inflation that could argue against an anticipated June interest rate increase from the Federal Reserve.

The Labor Department said on Friday that its Producer Price Index for final demand declined 0.5 percent as profit margins in the services sector, especially gasoline stations, were squeezed, and transportation and warehousing costs fell.

“The underlying message appears to be that pipeline inflationary pressures remain quite weak, even as energy prices have stabilized and gasoline prices have drifted modestly higher,” said Millan Mulraine, deputy chief economist at TD Securities in New York.

The index dropped 0.8 percent in January. In the 12 months through February, it fell 0.6 percent, the first decline since the series was revamped in 2009. Economists had forecast an increase of 0.3 percent last month to a level unchanged from a year ago.

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