WASHINGTON – Wholesale prices paid to U.S. producers rose in March for the third month in a row, as fuel and food prices continued to rise, the U.S. Department of Labor’s Bureau of Labor Statistics said today.
The Producer Price Index for Finished Goods rose a seasonally adjusted 1.1 percent compared with the month before, after rising 0.3 percent in February and 1.0 percent in January. The March increase was nearly twice the 0.6-percent gain predicted by a Bloomberg News survey of 71 economists. (Their estimates ranged from no change to an increase of 1.8 percent.)
The core PPI excluding food and energy goods rose 0.2 percent in March, matching the survey’s prediction, after rising 0.5 percent in February.
Among PPI components, the index for finished foods rose 1.2 percent in March after falling 0.5 percent the month before, the BLS said. Producer prices for finished energy goods rose 2.9 percent – more than three times February’s 0.8-percent increase – as prices for gasoline (+1.3 percent) and residential natural gas increased more slowly than the month before but diesel fuel, home heating oil and residential electricity prices rose faster in March than February.
Compared with March 2007, the PPI rose 6.9 percent to 175.4 points (1982 = 100 points). Finished energy goods rose 20.4 percent while finished foods rose 5.8 percent. The core index excluding food and energy goods rose 2.7 percent year-over-year.
Fears of a deeper slump may prompt Federal Reserve policymakers to lower interest rates again this month, despite rising inflation, analysts said.
“The pressures are building, though spillover into the consumer level will be quite limited,” Joshua Shapiro, chief U.S. economist at New York forecasting firm Maria Fiorini Ramirez Inc., told Bloomberg News. “A lot of the increase [in raw-material and producer prices] is going to end up being eaten by companies and will hurt profit margins. Inflation isn’t the focus right now for the Fed.”
Additional information, including the 20-page Producer Price Indexes report, is available from the U.S. Department of Labor’s Bureau of Labor Statistics at www.bls.gov/ppi.
