U.S. inflation at the wholesale level fell a surprisingly steep 1.4 percent in February, the largest drop in nearly three years, as energy and food costs plunged but other prices rose 0.3 percent in a sign of possible price pressures, the government reported Tuesday. The decline in the Labor Department's producer price index (PPI)-a measure of prices paid to farms, factories, and refineries-was larger than expected by Wall Street analysts. But the rise in "core" prices, which exclude volatile energy and food costs, was bigger than expected. Energy prices fell 4.7 percent, the biggest decline since April 2003, and food costs dropped 2.7 percent, the biggest decline since April 2002. While economists say falling energy costs are helping to improve the outlook for potential inflation, the rise in wholesale core prices could renew inflation worries that had been set aside due to contained consumer price data.
