Higher energy costs pushed producer prices up by a bigger-than-expected 1.3 per cent in February, and there was a large drop in the number of initial jobless claims filed last week, Labor Department data today showed.
Separate data from the New York Federal Reserve showed manufacturing activity in that area plunging to its lowest level since May 2005.
The increase in producer prices followed a 0.6 per cent decrease in January and was well above the 0.5 per cent gain analysts polled by Reuters ahead of the report were expecting.
Excluding volatile food and energy prices, the so-called core Producer Price Index advanced 0.4 per cent, still somewhat more than the 0.2 per cent gain economists were expecting. A 4.1 per cent surge in tobacco prices helped push up core prices.
Separate Labor Department data showed that first-time jobless claims fell by a larger-than-expected 12,000 to a seasonally adjusted 318,000. Analysts polled ahead of the report were expecting claims to increase slightly.
The more reliable four-week moving average of initial claims dropped by 10,250 to 329,250.
Still, the number of workers remaining on unemployment benefits rose by 48,000 to 2.576 million, for the week ended March 3rd, the most recent week these data were available. That was close to the 2.54 million continued claims analysts were expecting.
US Treasury debt prices fell after data showed a bigger-than-expected gain in the PPI, spurring inflation worries ahead of next week's Federal Reserve policy meeting.
Energy prices advanced by 3.5 per cent in February after falling 4.6 per cent the prior month, the report showed. Food prices were up 1.9 per cent after a 1.1 per cent gain in January.