Producer Prices Fell in April, Most Since July

Washington, DC, March 17, 2010--Lower energy costs pushed the U.S. producer price index to a drop of 0.6% in February, the Labor Department said.

Core producer prices, excluding volatile food and energy, rose 0.1%. Economists had been anticipating a decline of 0.1%.

February's decline in the headline PPI was the largest since a fall of 1.2% last July. In January, the PPI rate had jumped 1.4%, while the core rate had risen 0.3%.

Tame inflation could allow the Fed to be patient in exiting its policy of keeping the benchmark U.S. interest rate near zero. The Fed reiterated in its statement that it believes rates can remain extremely low "for an extended period."

Energy prices fell 2.9% at the wholesale level in February, the Labor Department's data showed. It marked the first drop in four months and the biggest since last July.

Gasoline prices fell 7.4% on the month.