Wholesale prices rose less than expected in March, which may go some way to easing concerns that inflation will remain higher than many economists expect for longer.
Producer prices rose 0.2% this month, below the Dow Jones consensus estimate of 0.3% and below February’s 0.6% gain Published on Thursday From the Bureau of Labor Statistics, Department of Labor.
However, on a 12-month basis, PPI climbed 2.1%, the largest increase since April 2023, suggesting that pressure on pipelines could lead to higher inflation.
Excluding food and energy, core PPI also rose 0.2%, in line with expectations. Excluding core-level trade services, the monthly increase was 0.2%, but the annual increase was 2.8%.
The news came a day after the Bureau of Labor Statistics reported that consumer prices rose again more than expected in March, raising concerns that the Federal Reserve will not be able to cut interest rates soon.
In terms of producer prices, gains in March were driven by the services sector, which rose 0.3% for the month. Among them, the securities brokerage and other investment-related expenses index increased by 3.1%.
Conversely, commodity prices fell 0.1% after rising 1.2% in February. Energy final demand costs have been rising recently but actually fell 1.6% this month. However, final demand food and wholesale prices of goods excluding food and energy increased by 0.8% and 0.1% respectively.
Although prices at the pump have been rising, the final demand index for gasoline fell by 3.6%. That contrasts with the Consumer Price Index, which showed gasoline rose 1.7% this month.
Markets showed little reaction to the data, with futures tied to major stock indexes edging higher despite lower Treasury yields.
In other economic news Thursday, Initial application for unemployment benefits It fell to 211,000, down 11,000 from last week’s upwardly revised level and below Dow Jones’ forecast of 217,000.
According to data released by the Labor Department, the number of people continuing to apply for unemployment benefits has increased to 1.82 million, a week late, an increase of 28,000 from the same period.
Economic data is being closely watched as the Federal Reserve considers its next steps in monetary policy.
The consumer price index released on Wednesday shook markets, which had been expecting a series of steep interest rate cuts this year. The report showed annual inflation at 3.5%, well above the Fed’s 2% target.
Markets are now pricing in only two rate cuts this year, likely not until September, according to CME Group data.
