Wholesale prices dropped for a third consecutive month in February, a sharp 0.6 percent decline led by the biggest plunge in energy costs in 18 months, the government said Friday.
But a second report indicated that the recession continued unabated last month.The Labor Department said the February decline in its Producer Price Index, which tracks inflation one stop short of retail, followed drops of 0.1 percent in January and 0.6 percent in December.
While the news on wholesale prices was good, the Federal Reserve said that output at the nation's factories, mines and utilities sank 0.8 percent with the declines broadbased across the manufacturing sector. It was the fifth consecutive monthly decline, representing the longest stretch of industrial weakness since the depths of the last recession eight years ago.
Wholesale prices have fallen at an annual rate of 4.8 percent over the past three months, the biggest decline since early 1986. That represented a sharp turnaround from the 5.6 percent wholesale inflation rate for all of 1990, the worst in nine years.