US February PPI up 0.4%

US February PPI up 0.4%

The US Labor Department today disclosed that the US producer price index (PPI) rose 0.4% in February 2005. A surge in energy prices contributed to the overall PPI increase. Excluding food and energy prices, core PPI increased 0.1%. Economists had been expecting a 0.3% gain in the PPI and a 0.1% in the core prices. Prices of intermediate goods rose 0.7% in February. Raw material prices, however, fell 1.6%. The inflation figures are likely to have an impact on US Federal Reserve policymakers in Washington. Analysts expect that the Federal Open Market Committee will raise interest rates by a quarter-percentage point to 2.75%.