PPI Unexpectedly Declines in March While Core Index Is Minimally Changed
Both energy & food prices decline.
Price gain in core goods remains firm.
Services prices decline.
The Producer Price Index for final demand fell 0.4% (+2.7% y/y) during March after increasing 0.1% in February, revised from no change and rising an unrevised 0.6% in January according to the Bureau of Labor Statistics (BLS). The March reading compared to a 0.2% rise expected in the Action Economics Forecast Survey. Producer prices excluding food, energy & trade services rose 0.1% (3.4% y/y) after increasing 0.4% in February, revised from 0.2%, after a 0.4% January gain, revised 0.3%. The PPI excluding food & energy eased 0.1% (+3.3% y/y) after rising 0.1% in February, revised from down 0.1%. A 0.3% increase had been expected.
Energy prices declined 4.0% (-6.7% y/y) during March, after falling 1.3% in February. Gasoline costs fell 11.1% (-16.5% y/y) after falling 4.5% while home heating oil prices declined 5.5% (-14.4% y/y) after a 9.8% February drop. Electric power prices rose 0.7% (1.1% y/y) in March following a 0.4% February gain and natural gas costs strengthened 2.1% (9.8% y/y) following a 1.3% rise. Diesel fuel prices declined 6.1% (-25.2% y/y) after a 3.8% slump.
Final demand food prices declined 2.1% (+3.7% y/y) in March after rising 1.8% in February. Egg prices weakened 21.3% (+165.4% y/y) last month following a 28.1% increase. Prices for fresh and dry vegetables fell 7.7% (-33.3% y/y) after rising 6.0% in February. Beef & veal prices declined 6.3% (+1.6% y/y) after falling 1.8% while dairy product prices fell 1.2% (+3.7% y/y) in March after a 0.1% uptick during February.
Final demand goods prices excluding food & energy rose 0.3% (2.4% y/y) in March, the same as in February. Core finished consumer goods prices rose 0.1% (2.1% y/y) after a 0.4% February rise. Core nondurable goods prices edged 0.1% higher (2.4% y/y) last month after rising 0.5% in February. Durable consumer goods prices improved 0.3% (1.7% y/y), after moving 0.2% higher in February. Capital equipment prices rose 0.3% (2.6% y/y) last month following a 0.2% gain. Core government-purchased goods prices rose 0.3% (2.5% y/y) in March, after a 0.2% February increase.
Final demand services prices declined 0.2% (+3.6% y/y) last month after holding steady in February. Trade services prices fell 0.7% (+3.1% y/y) last month following a 1.1% decline. Trade of finished goods prices declined 0.8% (+2.8% y/y) and added to a 1.2% February decline. Prices for final demand transportation and warehousing services weakened 0.6% (+1.8% y/y) in March, after improving 0.1% in February. Services prices less these costs rose 0.1% (4.0% y/y) last month, after a rise of 0.5% in February.
Construction costs increased 0.5% (2.3% y/y) in March, after slipping 0.1% in February.
Prices for intermediate demand of processed goods held steady (0.9% y/y) following a 0.4% rise. Processed energy goods prices fell 3.2% last month after increasing 0.2% in February, while food prices slipped 0.5% following a 2.2% February gain.
