The Producer Price Index for final demand (PPI) surged by 0.7% in February, boosted by services, following an unrevised 0.5% rise in January. This increase could lead to further increases in producer prices due to the ongoing Middle East oil war and ongoing import pass-through issues. The PPI increased by 3.4% in the 12 months through February, following a 2.9% increase in January, according to the Labor Department's Bureau of Labor Statistics. Prior to the PPI data, economists estimated that the PCE excluding volatile food and energy components would have increased 0.4%, more than double the monthly pace of increase needed to bring inflation back to its target.