HOUSTON, Texas (KTRK) — The economy is top of mind for some people, especially in the Houston area.
The cost of living, which includes the price of goods and services, has been ebbing and flowing more than usual for much of the past five years.
On Wednesday, the Producer Price Index was released. The report tracks wholesale prices. The most recent report shows that wholesale prices rose a seasonally adjusted 0.7% in February and are up roughly 3.4% annually, according to the U.S. Bureau of Labor Statistics.
The report suggests that producer pipeline inflation remains elevated even as the U.S. Federal Reserve continues to work to balance inflation and keep the labor market strong.
On Wednesday, the U.S. Federal Reserve held interest rates steady. The move is the first since the U.S.-Israel war with Iran began.
“The Fed is in a really tight spot right now. It has two goals. They want full employment in the labor market and stable prices in the economy. Those things are going in opposite directions,” John Diamond, the director of Rice University’s Center for Tax and Budget Policy, said.
The economy is facing headwinds, but it does not necessarily mean it’s a recipe for disaster, according to economists.
“It is the recipe. Sometimes you put the ingredients together, and there are other ingredients we haven’t discussed, so yes, these are all very bad ingredients to mix in the bowl, but having said that, I don’t think the sky is falling,” Diamond said.
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