I don’t pay as much attention to the producer price index, because while it probably reflects some likely impact on future consumer prices, the link appears somewhat attenuated, particularly when there are volatile factors at play, like tariffs and the Iran strikes. Producer prices are what those who are providings goods and services to consumers pay for the components of those services. So I don’t much care that supposedly the PPI for February rose .7% month over month and 3.4% year over year. Without food and energy included, it was .5% and 3.9%. All numbers were well above expectations. While all these increases were higher than expected, which may just mean economists are bad predictors, there was a lot of volatility in prices among categories, with some up a lot and some down. For example, the prices for fruits and vegetables rose a huge percent, accounting for a lot of the food price rise. That might be expected in winter. Service costs account for much of the rise; goods for less. And within services a lot was related to trade and transportation which have been affected by tariff changes. Something called traveler accomodation services also contributed in a big way to the increase. As I said, we will eventually see whether any of these increases actually impact consumer prices.
