Producer Price Index Jumps 0.7 percent, Third Straight Month of Big Increases

Services PPI surged for the third month, up another 0.5 percent.

Today, the BLS released its report on PPI Final Demand for February 2026.

Once again, the PPI was on the hot side. The Bloomberg consensus was for a 0.3 percent rise.

PPI Final Demand Month-Over-Month

• Final Demand: 0.5 percent
• Final Demand Goods: 1.1 percent
• Final Demand Services: 0.5 percent
• Final Demand Food: 2.4 percent
• Final Demand Less Food and Energy: 0.5 percent

Final Demand Services

• The index for final demand services rose 0.5 percent in February, the third straight advance. Nearly three-fourths of the February broad-based increase can be traced to prices for final demand services less trade, transportation, and warehousing, which moved up 0.6 percent. The indexes for final demand trade services and for final demand transportation and warehousing services also rose, 0.4 percent and 0.5 percent, respectively.
• Product detail: About 20 percent of the February advance in the index for final demand services is attributable to a 5.7-percent jump in prices for traveler accommodation services. The indexes for food and alcohol wholesaling; securities brokerage, dealing, investment advice, and related services; fuels and lubricants retailing; long-distance motor carrying; and inpatient care also rose. In contrast, margins for apparel, footwear, and accessories retailing fell 4.5 percent. The indexes for gaming receipts (partial) and for airline passenger services also decreased.

Final Demand Goods

• Prices for final demand goods increased 1.1 percent in February, the largest rise since moving up 1.6 percent in August 2023. Forty percent of the February broad-based advance can be traced to the index for final demand foods, which jumped 2.4 percent. Prices for final demand energy and for final demand goods less foods and energy also increased, 2.3 percent and 0.3 percent, respectively.
• Product detail: Over 20 percent of the February rise in the index for final demand goods is attributable to a 48.9-percent jump in prices for fresh and dry vegetables. The indexes for diesel fuel, chicken eggs, gasoline, jet fuel, and tobacco products also increased. Conversely, prices for jewelry and jewelry products fell 4.0 percent. The indexes for home heating oil and for soft drinks also declined.

Intermediate Demand

Within intermediate demand in February, price increases were broad-based, with the index for processed goods rising 1.6 percent, prices for unprocessed goods advancing 3.1 percent, and the index for services moving up 0.8 percent.

Processed Goods for Intermediate Demand

• The index for processed goods for intermediate demand rose 1.6 percent in February, the largest increase since moving up 2.0 percent in August 2023. Sixty percent of the February advance is attributable to a 5.5-percent jump in prices for processed energy goods. The indexes for processed materials less foods and energy and for processed foods and feeds also rose, 0.8 percent and 0.3 percent, respectively. For the 12 months ended in February, prices for processed goods for intermediate demand increased 4.0 percent, the largest 12- month advance since moving up 4.8 percent in December 2022.
• Product detail: Nearly 30 percent of the February rise in the index for processed goods for intermediate demand can be traced to prices for diesel fuel, which increased 13.9 percent. The indexes for utility natural gas, electronic components and accessories, jet fuel, industrial chemicals, and meats also moved higher. In contrast, prices for sugar and confectionery products fell 1.8 percent. The indexes for asphalt and for plastic resins and materials also decreased.

Unprocessed Goods for Intermediate Demand

• The index for unprocessed goods for intermediate demand advanced 3.1 percent in February, the largest increase since moving up 5.5 percent in January 2025. Sixty percent of the February rise is attributable to prices for unprocessed energy materials, which climbed 6.0 percent. The indexes for unprocessed foodstuffs and feedstuffs and for unprocessed nonfood materials less energy also advanced, 2.3 percent and 1.1 percent, respectively. For the 12 months ended in February, prices for unprocessed goods for intermediate demand declined 1.7 percent.
• Product detail: Over 30 percent of the February increase in the index for unprocessed goods for intermediate demand can be traced to a 10.9-percent rise in natural gas prices. The indexes for crude petroleum; slaughter steers and heifers; slaughter hogs; hay, hayseeds, and oilseeds; and carbon steel scrap also moved higher. Conversely, raw milk prices fell 9.1 percent. The indexes for slaughter cows and bulls and for cast iron scrap also declined.

Energy Surges Not War Related

Data for the February 2026 Producer Price Index (PPI) was collected by the Bureau of Labor Statistics (BLS) primarily during the Tuesday of the week containing the 13th of the month.

For February 2026, this standard collection period fell around Tuesday, February 10, 2026.

The 2026 war in Iran, involving attacks by the US and Israel, began on February 28, 2026.

Expect another big jump in producer prices will will eventually pass through to consumers.

PPI Final Demand Year-Over-Year

The year-over-year PPI measures generally bottomed min May of 2023.

Fed Chair Jerome Powell is more concerned about services than goods but this report was a disaster from many angles.

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