Vehicles move along the 2023 Chevrolet Bolt EV and EUV assembly line at the General Motors Orion assembly plant in Lake Orion, Mich.Carlos Osorio/The Associated Press
U.S. wholesale prices came in hotter than expected in February.
The Labor Department reported Wednesday that its producer price index – which measures inflation before it hits consumers – rose 0.7 per cent from January, and 3.4 per cent from February, 2025. The year-over-year increase was the most since February, 2025.
The gains were bigger than economists had forecast, and they occurred before the war with Iran pushed energy prices sharply higher.
Contributing to the uptick last month were higher prices for hotels and food.
The report comes as Federal Reserve policy-makers meet in Washington to decide what to do with their benchmark interest rate. They cut it three times in 2025 but have since held off – and are expected to announce Wednesday that they’ve done so again. The Fed is waiting to see whether inflationary pressures ease and whether the slumping U.S. job market needs help from lower borrowing costs. The war with Iran has clouded the inflation picture by driving up energy prices.
Last week, the government issued two reports showing that inflation at the consumer level remained above the Fed’s 2-per-cent target before the U.S. and Israel attacked on Iran.
The Labor Department reported a week ago that consumer prices rose 2.4 per cent last month compared to February 2025. And the Commerce Department said Friday that the Fed’s favoured inflation measure – the personal consumption expenditures (PCE) price index – was up 2.8 per cent in January from a year earlier. Core PCE prices rose 3.1 per cent, biggest increase in nearly two years.