U.S. producer prices likely to continue to rise in months ahead

U.S. producer prices have been rising. In February, producer inflation had risen 0.2 percent to a year-on-year rate of 2.8 percent. Services inflation mainly drove the rise in February, as goods prices dropped down. Food and energy prices were the main drag on prices for goods. Trade services prices had also declined, but transportation and warehousing costs rose enough to counter that fall.

Input cost growth had accelerated in February, implying that producer prices will continue to rise in months ahead on higher intermediate prices, noted Wells Fargo in a research report. Still, the price growth rate seems to be manageable in the near-term. Producer prices are expected to be a significant measure to watch in months ahead to determine the effect of recently imposed tariffs on steel and aluminum on final goods prices.

According to Wells Fargo, producer prices are likely to have risen 0.1 percent in March.

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