More Evidence Is Showing That Prices Are Rising in the U.S.
Inflation is creeping up in the U.S. economy. Here’s more proof.
(Bloomberg) -- Three measures of price pressures for American businesses showed they’re facing higher production costs, adding to evidence that inflation is creeping up in the U.S. economy.
The Empire State Manufacturing prices-paid index increased 12.4 points to 48.6 in February, the highest level since 2012, according to the survey published Thursday by the Federal Reserve Bank of New York. A separate index from the Philadelphia Fed showed prices paid in that region also surging in February, reaching the highest since May 2011.
The latest figures follow consumer-inflation numbers that helped send yields on 10-year Treasuries to a four-year high this week, after wage data roiled markets earlier this month on concerns that the Federal Reserve will raise borrowing costs more aggressively.
“Input price increases picked up noticeably,” according to the New York Fed report. “The index for future prices paid stayed close to last month’s multi-year high.”
In Washington, the Labor Department said in a report that U.S. wholesale prices rose in January on costs of energy and hospital services. The producer-price index increased 0.4 percent from the prior month, matching the median estimate in a Bloomberg survey of economists, after no change the prior month, the report said.
What Our Economists SayOn the Fed indexes: “The prices paid component in both surveys pointed to mounting inflation pressures, albeit with limited success in passing the rise in input price along to customers.”On the PPI: “PPI service prices, which make up the bulk of the PPI, are likely to continue rising, driven by moderately higher wages. Prices of core goods will greatly depend on currency fluctuations. Pipeline price pressures will help to gradually lift consumer prices, providing comfort to the Fed to achieve its 2 percent inflation target in the medium term.” -- Carl Riccadonna and Yelena Shulyatyeva, Bloomberg Economics Read more: full reaction notes on Fed indexes and PPI from Bloomberg Economics. |
The PPI excluding food, energy, and trade services, a measure some economists prefer because it strips out the most volatile components, rose 2.5 percent in January from a year earlier -- the fastest in data back to August 2014 -- following a 2.3 percent gain.
To contact the reporter on this story: Katia Dmitrieva in Washington at edmitrieva1@bloomberg.net.
To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net, Scott Lanman at slanman@bloomberg.net, Randall Woods
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