Inflation fears continue to rise as the Producer Price Index jumped 0.5 percent, which was the biggest gain since November 2006. Overall, producer prices declined but these sharp rises in the cost of prescription drugs, motor vehicles, and capital equipment indicated that inflation remains a clear threat. The report was a disappointment to economists who had been optimistic following a flat CPI last week. Which report proves to be more significant remains to be seen.

From The New York Times:
Businesses paid more for gasoline, automobiles and most products last month, reinforcing fears that inflation is rising. While prices for grain and gasoline have skyrocketed in recent months, the pressures had not appeared to seep into the broader economy. But the core measure of the Producer Price Index, which excludes volatile energy and food products, jumped 0.5 percent in February, the Labor Department said on Tuesday. It was the biggest gain since November 2006.