Wholesale prices down for fourth consecutive month

WASHINGTON – Wholesale prices fell for a fourth straight month in February as a decline in food prices offset an increase in gasoline prices.
The Labor Department said Friday its producer price index, which measures inflation pressures before they reach consumers, dropped 0.5 percent in February. The figure follows a 0.8 percent fall in January, which was a record decline in a government series that goes back to 2009.
Core producer prices, which exclude volatile food and energy costs, also fell 0.5 percent during the month. Over the past 12 months, producer prices shed 0.6 percent while core prices climbed a modest 1 percent.
Since last year, inflation moved even farther below the Federal Reserve’s goal of seeing prices rise about 2 percent annually.
Food costs were down 1.6 percent in February. Energy costs overall were flat as declines in natural gas and electric power combined with a gain in gasoline, which rose 1.5 percent.
Gasoline prices were falling since the middle of last year and hit a six-year low in January of $2.03 a gallon, according to AAA. But gas prices rose since then, with the nationwide average for a gallon of regular now at $2.45, up from $2.23 a month.
Robust hiring in the past 12 months and lower gas prices lifted consumer confidence in January and February to its highest levels since the recession. But those trends have yet to boost consumer spending this year, a key driver of economic activity. The government reported retail sales fell for a third month in a row in February as harsh winter weather depressed shopping.
But many analysts look for those declines to reverse in the coming months. The economy is expected to turn in its strongest growth this year in a decade while overall inflation stays modest.
When the Federal Reserve meets next week, it’s likely officials will drop language they plan to be “patient” before starting to raise a key interest rate from a record low. But economists project the Fed won’t actually raise rates until at least June and possibly September or later because it remains concerned about low inflation.