Producer Prices Jump 0.7% in February as Inflation Pressures Reaccelerate

The Producer Price Index for final demand increased 0.7% month-over-month, following gains of 0.5% in January and 0.4% in December, according to the Bureau of Labor Statistics. On a year-over-year basis, producer prices climbed 3.4%, matching the largest annual increase since February 2025. 

The increase was broad-based, with services prices rising 0.5% and accounting for more than half of the monthly gain. Meanwhile, goods prices jumped 1.1%, reflecting continued cost pressures across supply chains. 

Core measures also remained firm. The index for final demand excluding foods, energy and trade services rose 0.5%, marking its tenth consecutive monthly increase, and is now up 3.5% over the past 12 months. 

The data suggests that while consumer inflation has shown signs of moderating, underlying producer-level price pressures remain persistent, particularly across services and core categories—an ongoing challenge for policymakers monitoring inflation trends. 

“February producer price index data confirms that the Fed had an inflation problem even before the Middle East crisis,” Sonu Varghese, Chief Macro Strategist Carson Group, told Connect Money. “The data was hotter than expected across the board, and we’re likely to see some ugly inflation prints over the next few months if the crisis persists. The chance of any rate cuts this year are close to zero, unless the labor market really breaks.”