U.S. Producer Prices Rise 0.2% In March, In Line With Estimates

Following yesterday’s hotter-than-expected consumer price inflation data, the Labor Department released a report on Thursday showing U.S. producer prices increased in line with economist estimates in the month of March.

The Labor Department said its producer price index for final demand crept up by 0.2 percent in March after climbing by 0.6 percent in February. The uptick matched expectations.

Meanwhile, the report said the annual rate of producer price growth accelerated to 2.1 percent in March from 1.6 percent in February.

The annual rate of growth was the fastest since surging 2.3 percent last April but came in slightly slower than the 2.2 percent jump forecast by economists.

The modest monthly increase in producer prices was led by higher services prices, which rose by 0.3 percent for the second straight month.

Prices for transportation and warehousing services advanced by 0.8 percent, while prices for trade services rose by 0.3 percent and prices for other services crept up by 0.2 percent.

On the other hand, the Labe Department said prices for goods edged down by 0.1 percent, with a 1.6 percent slump in energy prices helping offset a 0.8 percent increase in food prices.

The report also said producer prices excluding food, energy and trade services rose by 0.2 percent in March after climbing by 0.3 percent in February.

The annual rate of growth by producer prices excluding food, energy and trade services inched up to 2.8 percent in March from 2.7 percent in February.

“The report won’t add to investor panic from yesterday’s CPI, but it also doesn’t suggest any significant disinflation in the pipeline,” said FHN Financial Economic Analyst Mark Streiber. “The problems in consumer price inflation are focused in service prices that are much less impacted by the price pressures captured by the PPI.”

Largely reflecting continued growth in prices for shelter and gasoline, the Labor Department released a separate report on Wednesday showing U.S. consumer prices advanced by slightly more than expected in the month of March.

The Labor Department said consumer prices climbed by 0.4 percent in March, matching the increase seen in February. Economists had expected consumer prices to rise by 0.3 percent.

Excluding prices for food and energy, core consumer prices still rose by 0.4 percent for the third consecutive month. Core consumer prices were also expected to increase by 0.3 percent.

The report also said the annual rate of consumer price growth accelerated to 3.5 percent in March from 3.2 percent in February. Economists had expected a more modest acceleration to 3.4 percent.

Meanwhile, the annual rate of core consumer price growth came in at 3.8 percent in March, unchanged from February. Core price growth was expected to slow to 3.7 percent.