United States producer prices rose more than expected in February as the services cost has increased and the annual growth was the largest in nearly five years, pointing to the inevitably rising inflationary pressures.
Inflation is gaining momentum due to the reduction of the labor market, which is expected to generate strong wages growth, which may allow the Federal Reserve to raise interest rates on Wednesday.
"Steadily rising inflation gives the Fed more reason to raise the price tomorrow," said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto.
The labor Department said on Tuesday that the producer price index for final demand rose last month by 0.3% after rising 0.6% in January. Economists polled by Reuters had forecast a 0.1% rise.