Weak profit margins dampen US producer prices in February.
The Labour Department said on Friday its producer price index for final demand fell 0.5 per cent after dropping 0.8 per cent in January.
Washington -- US producer prices unexpectedly fell in February on weak profit margins for trade services, pointing to tame inflation that could argue against an anticipated June interest rate hike from the Federal Reserve.
The Labour Department said on Friday its producer price index for final demand fell 0.5 per cent after dropping 0.8 per cent in January. It was the fourth straight monthly decline in the PPI.
In the 12 months through February, producer prices fell 0.6 per cent, the first drop since the series was revamped in 2009, after being unchanged in January.
Economists polled by Reuters had forecast the PPI rising 0.3 per cent last month and remaining unchanged from a year ago.
"The underlying message appears to be that pipeline inflationary pressures remain quite weak, even as energy prices have stabilised and gasoline prices have drifted modestly higher," said Millan Mulraine, deputy chief economist at TD Securities in New York.
Consumer morale falls
Meanwhile, US consumer sentiment fell in March as optimism slipped among lower- and middle-income households, a survey released on Friday showed.
The University of Michigan's preliminary March reading on the overall index on consumer sentiment came in at 91.2, down from the final February reading of 95.4. It was below the median forecast of 95.5 among economists polled by Reuters.
"Consumer optimism slipped in early March among lower- and middle-income households (-6.5 per cent from February) while confidence improved among households with incomes in the top third (+3.2 per cent)," survey director Richard Curtin said in a statement.
The survey's barometer of current economic conditions fell to 103 from 106.9 in February and below a forecast of 105.7. The survey's gauge of consumer expectations slipped to 83.7 from 88 and was below an expected 87.5.
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