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Business Digest: Wholesale prices up just 0.3% in February


ECONOMY

Wholesale prices up just 0.3% in February

WASHINGTON — Inflation at the wholesale level rose at just half the rate in February as the previous month, as a surge in energy prices slowed.

The Labor Department said Tuesday that its producer price index, which measures inflation pressures before they reach consumers, increased 0.3 percent in February following a 0.6 percent rise in January.

Over the past 12 months, wholesale prices are up 2.2 percent, reflecting a steady rise in inflation as energy prices have increased. Just six months ago, the year-over-year increase stood at zero.

The Federal Reserve is meeting this week and is expected to boost a key interest rate, in part to reflect rising inflation.

Part of the slowdown in the overall wholesale number in February reflected less of an increase in energy products, which rose 0.6 percent in February after jumping 4.7 percent in January.

The wholesale price report showed that food costs rose 0.3 percent in February after showing no gain in January.

The change in wholesale prices excluding food, energy and trade services was 0.3 percent in February and 1.8 percent over the past eight months.

AIRLINES

American brings back free meals on some flights

DALLAS — American Airlines said Tuesday that it plans to offer free meals to everyone in economy on two cross-country routes starting May 1.

The decision by the world’s biggest airline comes a month after Delta Air Lines announced that it would restore free meals in economy on a dozen long-haul U.S. routes this spring.

Airlines dropped free sandwiches and other meals in economy on domestic flights after brutal downturns in 2001 and 2008. They have been slow to bring back food despite rising profits, leading to grumbling by some passengers.

It’s unclear how far the food trend will go, but airlines can afford a few sandwiches and cheese platters after posting huge profits in recent years due to strong travel demand and cheaper fuel. American Airlines Group Inc. earned $2.7 billion last year.

ECONOMY

Student loan defaults rising, study finds

A new analysis of government data by the Consumer Federation of America found that the number of Americans in default on their student loans jumped by nearly 17 percent last year.

As of the end of 2016, there were 4.2 million Federal Direct Loan borrowers in default, meaning they’ve not made a payment in more than 270 days. That’s up from 3.6 million at the end of 2015.

As of the end of 2016, 42.4 million Americans owed $1.3 trillion in federal student loans, according to the U.S. Department of Education data. This doesn’t include borrowing through private student loans, credit cards, and home equity loans to finance the growing costs of college.

The Federal Reserve System puts the measure slightly higher at $1.4 trillion, as it includes private loans as well.

Student debt has risen along with the cost of education, which makes repayment difficult. The average amount owed per borrower rose to $30,650 in 2016, after rising steadily for years. In 2013, borrowers on average owed $26,300.

AIR TRAVEL

U.S. airlines post increase in delays

U.S. airlines are having trouble keeping flights on time this winter, and they are recording a sharp increase in long delays.

The Transportation Department said Tuesday that 42 flights in January were stuck on the ground so long that the airlines could face fines. That is the highest number of long ground delays in one month since February 2010, shortly before the rule allowing fines took effect.

Only 76 percent of flights on leading airlines arrived on time in January, down sharply from 81.3 percent a year earlier. The government defines on time as arriving within 14 minutes of schedule.

That followed a similar pattern in December, when delays were more common than a year earlier.

Hawaiian, Delta and American had the best on-time ratings. Virgin America had the worst.



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