Prices charged by U.S. producers of goods and services rose 2.1% in the 12 months that ended in March, outpacing the annual inflation rate of 1.6% recorded the previous month.
Despite the year-over-year increase in inflation, there was some good news in the Bureau of Labor Statistics’ Final Demand Producer Price Index (PPI). The month-on-month rate of increase slowed to 0.2% in March from 0.6% in February.
Economists had predicted even worse. The year-on-year increase is expected to be 2.3%, while the monthly forecast was for a 0.3% increase.
Core PPI, which excludes food and energy prices, rose 0.2%, in line with consensus expectations but down from February’s 0.3% rise. The annual increase was 2.4%, slightly higher than the expected 2.3% increase.
This was the highest annual increase in core PPI since September. Core inflation indicators have now risen for three consecutive months.
The so-called “core core” PPI, which excludes a measure of profit margins called traded services and food and energy prices, rose 0.2%, down from a downwardly revised 0.3% rise in the previous month. The 12-month rate of increase was 2.8%, up from 2.7% last month, which was revised downward. Initial estimates had predicted core PPI would rise 0.4% in February and 2.8% for the year.
Inflation remains very high on the services side of the economy. Service prices in March increased by 0.3% compared to February. Compared to March last year, service prices increased by 2.8%.
Commodity prices fell 0.1% in March after surging in February. This is due to energy prices falling by his 1.6. Food prices rose 0.8%. Excluding food and energy prices, commodity prices rose 0.1% over the month.
of producer price This measurement’s name derives in part from the fact that price changes are measured from the perspective of the seller of the product rather than the buyer. That is, it does not include sales or excise taxes or government subsidies paid to consumers. Shipping charges paid by the consumer are also excluded. The value of imported goods is not included because they are received by foreign producers rather than U.S. producers.
of final demand The name of this measurement derives in part from the fact that what is measured is the so-called “selling price.” user. That is, it is not a sale of components or materials used directly to create goods or services sold to consumers. These are products sold to customers who are government buyers, residential buyers, businesses purchasing capital goods, and foreign buyers.
In addition to the final demand goods and services index, the government calculates the following indexes: intermediate demand product. These are goods and services that businesses purchase as inputs to production, excluding capital expenditures. Intermediate goods include wood used to build homes, hardware that is assembled into computers, and wheat that is later processed into food.
Processed goods for intermediate production rose 1.6% in February, the largest increase since August. However, this was partially reversed in March, with prices of processed goods for intermediate demand falling by 0.5%. This decrease was caused by his 1.5% decrease in energy. Intermediate food and feed prices rose for the second consecutive month, and inflation accelerated from 0.3% to 0.6%. Excluding food and energy prices, prices of processed goods for intermediate demand fell by 0.4%.
