WASHINGTON (AP) - Inflation at the wholesale level rose at just half the rate in February as the previous month, as a surge in energy prices slowed.
The Labor Department said Tuesday that its producer price index, which measures inflation pressures before they reach consumers, increased 0.3 percent in February following a 0.6 percent rise in January.
Over the past 12 months, wholesale prices are up 2.2 percent, reflecting a steady rise in inflation as energy prices have increased. Just six months ago, the year-over-year increase stood at zero.
The Federal Reserve is meeting this week and is expected to boost a key interest rate, in part to reflect rising inflation.
The Fed believes the optimal increase for prices is a 2 percent gain each year. But for a number of years, inflation was well below that level. A deep recession and then a huge plunge in oil prices held overall inflation well below the 2 percent mark. However, with the rebound in oil prices that began last year and a stronger economy helping to boost employment, prices have begun to rise. However, they still remain below 2 percent as measured by the Fed's favorite inflation target, which is tied to consumer purchases.