US producer prices fell for the fourth consecutive month in February, highlighting a lack of inflationary pressure in the economy, according to Labor Department data released Friday.
The producer price index fell 0.5 percent, led by a 1.6 percent decline in food prices. Unlike in previous months, energy prices were flat as the oil market stabilized following a rapid price decline since June. In January a steep 10.3 percent drop in energy prices had pulled the PPI down 0.8 percent.
Core PPI, stripping out food and energy, fell 0.5 percent in February.
The fall in overall producer prices was unexpected; analysts had estimated a 0.3 percent increase, and a 0.1 percent gain in core PPI.
Year-over-year, producer prices were down 0.6 percent in February.
Despite the lack of upward pressure on prices, the Federal Reserve, which opens a two-day monetary policy meeting Tuesday, expects that longer-term inflation eventually will rise toward its 2.0 percent target. The Fed has said the current weakness in prices is largely due to transitory factors, such as falling oil prices.
The Fed's preferred inflation measure, the personal consumption expenditures price index, rose just 0.2 percent over the 12 months to January.
The consumer price index, which typically runs a bit weaker than PCE prices, was down 0.1 percent in January from a year earlier, the first year-over-year decline since October 2009.