Posted by Marcelo Perez

As the global economic slowdown persists, prices paid by the nation’s producers managed to squeak a gain for the month of February, rising for the second straight month after five consecutive declines. The US producer price index gained 0.1% in February, below the 0.4% target that was expected by economists. This comes after record declines in the 4th quarter of 2008, totaling close to 7%. Wholesales energy prices, which fell 9.1% in December, have much to do with the rise in prices for the current month. Energy prices were up 1.3% for the month, as gas prices increased 8.7% at the producer level.

Core PPI, which excludes energy and food prices because of their volatile nature, increased as well, climbing 0.2% after a 0.2% gain the previous month. Economists had forecast a 0.1% rise in the core PPI.

In the last year, producer prices have broken their underlying upward trend, having decreased by 1.3% in the last 12 months, the most since September 2002. But core prices are still in this inflationary trend, as witnessed by its 4.0% gain in the last year. Any increased demand in our economy and we may be looking at higher prices once more, especially with all the money being pumped into the economy by the Fed.

Via MarketWatch:

Among finished energy goods, gasoline prices rose 8.7%. Prices fell 11.1% for diesel fuel and 7.2% for home heating oil.

Inflation eased further back in the production pipeline. Prices for intermediate goods fell 0.9%, as the core fell 0.6%. Intermediate energy goods prices declined 2%, as food and feeds prices fell 1.4%.

Prices for crude goods fell 4.5%, as energy materials prices dropped 8.5%, and foodstuff and feedstuff prices fell 3.9%.

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