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Producer prices showed unexpected stability in February, with core prices actually declining, marking a significant shift in inflation trends. The core producer price index for final demand dropped by 0.1 percent, while the broader index remained unchanged for the month.
These figures notably outperformed economists’ predictions, which had anticipated increases of 0.3 percent in the broad producer price index and 0.5 percent in core producer prices. Instead of the projected increases, the economy experienced price stability and even decreases in core producer prices.
The producer price index measures what U.S. businesses receive for their goods, services, and construction sold across various sectors, including personal consumption, capital investment, government purchases, and exports. This measurement excludes both export prices and sales taxes.
The PPI inflation report is out and it’s finally breaking the previous trend.
The headline Producer Price Index is better than expected and it’s finally going down after 4 months of uptrend. pic.twitter.com/FBKDQQNKeO
— Quarter Chart (@QuarterChart) March 13, 2025
In contrast, the consumer price index focuses on prices paid by U.S. consumers, incorporating sales taxes but excluding export prices and costs paid by businesses, nonprofits, and government entities. While these two indices may show different results in individual months, they generally follow similar patterns over time.
Annual inflation measures remain high, reflecting the inflation surge during the Biden administration. The PPI shows a 3.2 percent increase from the previous year, while core PPI rose 3.4 percent. January’s figures were revised upward to 0.6 percent from 0.4 percent, suggesting an inflation spike during Biden’s final months in office, possibly connected to accelerated spending of appropriated funds.
The “super-core” PPI, which excludes food, energy, and trade services margins, increased by 0.2 percent monthly and 3.3 percent annually. Final demand goods prices rose 0.3 percent in February, showing improvement from January’s rate. The services sector, despite driving most of the past year’s inflation with a 3.9 percent annual increase, experienced a 0.2 percent decline in February.
All the idiotic talk in legacy media about inflation getting worse under Trump getting reality check by the facts:
Producer Price Index coming in lighter than expected.
Squeezing Bidenomics out of the economy will take time, but it’s going in the right direction. pic.twitter.com/txWQzioSRI— David Asman (@DavidAsmanfox) March 13, 2025
“When I win, I will immediately bring prices down, starting on Day One,” Donald Trump said on the campaign trail last summer, although critics disputed his ability to achieve this through tariff policies. The recent data suggests some movement toward price stability, though the impact of new policies remains to be seen.
