Producer prices edge up

U.S. wholesale prices rose again in March, with producer inflation hitting 4% from a year earlier, the fastest annual pace since February 2023. (bls.gov) The Labor Department said its Producer Price Index for final demand increased 0.5% in March after gains of 0.5% in February and 0.6% in January. Prices for goods jumped 1.6% in March, while services were unchanged. (bls.gov) Energy was the main driver. The Bureau of Labor Statistics said final demand energy prices rose 8.8% in March, including a 15.1% jump in gasoline, while food prices increased 0.6%. (bls.gov) Producer prices track what businesses receive for their goods and services before those costs fully reach shoppers. March’s report followed a consumer inflation reading on April 10 that showed gasoline helped push the Consumer Price Index up 3.3% from a year earlier. (bls.gov) (cnn.com) The March producer report landed as oil and fuel markets were reacting to the Middle East conflict. Reuters reported that energy-related costs tied to the conflict were keeping inflation pressure elevated even as the monthly increase came in below economists’ forecasts. (reuters.com) Some underlying measures were cooler than the headline number. Prices excluding food and energy rose 0.1% in March and 3.8% from a year earlier, while prices excluding food, energy and trade services rose 0.2% on the month and 3.6% on the year. (bls.gov) (cnbc.com) Services did not add to the headline increase in March because gains in transportation and warehousing were offset by weaker trade margins. The Bureau of Labor Statistics said transportation and warehousing services rose 1.3%, while trade services fell 0.3%. (bls.gov) Markets initially treated the report as less severe than feared. Bloomberg reported that U.S. stock futures extended gains after the data, with investors focusing on the smaller-than-expected monthly increase despite the energy shock. (bloomberg.com) The next test comes with April inflation data, which will show how much of March’s fuel surge carries forward. For now, the March numbers show energy pushing wholesale costs higher even as some core measures stayed more contained. (bls.gov)