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The numbers: Wholesale prices rose a sharp 0.8% in February and signaled that the hottest U.S. inflation in 40 years is unlikely to cool off in the spring.
Wall Street economists had forecast a 0.9% increase.
The increase in wholesale prices over the past year stayed at 10% for the second month in a row, the government said Tuesday.
Wholesale prices reflect what businesses pay for supplies such as grains, metals, lumber, packaging, computer chips and so forth. Higher costs tend to translate into rising prices for customers and more inflation.
In a potentially bit of good news, the increase in so-called core wholesale prices rose a scant 0.2% increase to mark the smallest advance in 15 months.
The core rate excludes food, energy and retail trade margins and is viewed by the Federal Reserve as a better indicator of inflation.
Yet the cost of groceries and gas have risen sharply and are likely to remain high in the months ahead, suggesting little relief for consumers. Food and fuel are two of biggest expenses for households.
Big picture: The biggest surge in inflation since the early 1980s spells trouble. The Federal Reserve plans to raise interest rates on Wednesday for the first time in four years to try to tamp down price increases, a move that will raise costs for auto loans, mortgages and other credit.
Economists say high inflation is expected to persist through the summer before starting to wane, but that assumes the war in Ukraine doesn’t get any worse. The conflict has sent the price of oil, wheat and other business supplies surging again. Both countries are major producers of grains and energy.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to slightly higher in Tuesday trades. Stocks have been under pressure since the Russian invasion of Ukraine and pending rate hikes by the Fed.
