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**Producer Price Index (PPI) Remains Stable in February 2025 Despite Increase in Egg Costs, Decrease in Gas Costs**
*Publication Date: March 13, 2025, 9:39 AM ET*
**Main Points:**
* Wholesale egg costs increased significantly by 53.6% in February compared to January.
* A 4.7% decline in gasoline costs balanced out the egg cost increase, leading to no change in the overall Producer Price Index (PPI) for the month.
* Wholesale costs are usually a measure of consumer price inflation, but the forecast is unclear for the upcoming months due to the President’s tariff strategies, which might push costs higher.
**Assessment:**
The Producer Price Index (PPI) for February did not change from January, as decreasing gasoline costs counteracted the sharp rise in egg costs.
Following a revised 0.6% rise in January, the PPI was stable in February, with a 4.7% drop in gasoline costs balancing out a considerable 53.6% surge in egg costs. Economists surveyed by Dow Jones Newswires and The Wall Street Journal had predicted a 0.3% rise.
The data implies that inflationary pressures were easing more than predicted before the President’s actions in March, which involved implementing, canceling, and promising a series of tariffs on U.S. trading partners, disrupting the inflation forecast. If these tariffs are implemented, they could result in increased costs. Producer costs are regarded as a leading indicator of changes in consumer costs, impacting what consumers pay for goods.
Justin Begley, an economist at Moody’s Analytics, mentioned that the February moderation corresponds with expectations of easing inflation in the coming months before trade tensions start to affect costs. However, the next report will be essential in determining whether February’s weakness was short-lived.
These indications of easing inflation could influence Federal Reserve officials, who are scheduled to convene next week to decide on the federal funds rate, which impacts borrowing costs for various loans.
The U.S. central bank is carefully balancing on a thin line as it attempts to control rising prices by raising borrowing costs, while also trying to avoid a large surge in joblessness. The positive aspect is that rising prices appear to be slowing down, providing the central bank with greater flexibility to lower borrowing costs if necessary. This could be particularly helpful if the trade regulations implemented by the previous administration begin to negatively impact the employment sector – the U.S. central bank could intervene and stimulate the financial system.
Monetary institutions are anticipating that the U.S. central bank will maintain its current borrowing costs at its upcoming gathering. This forecast is derived from the CME Group’s FedWatch Tool, which examines trading information to anticipate modifications in borrowing costs.
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