WASHINGTON — Final demand PPI rose by 0.3% in March, well ahead of the 0.1% gain expected, with a stronger-than-expected 0.3% gain outside of food and energy prices, data released by the Bureau of Labor Statistics Tuesday showed.
While the gain is partially attributable to a surge in food prices, the underlying core measures show that price inflation was solid in March.
The personal consumption price measure in the data, which some analysts use a preview measure for CPI and the PCE price index, rose by only 0.1% and was up 0.1% ex. food and energy, but rose 0.3% also excluding trade services, suggesting some upside risk to the consumer inflation data.
Within the core, there were notable gains for the prices of cable services, hospital care, and motor vehicles, but wireless communications services prices fell 1.4%, an echo of the price decline seen in the CPI report a year ago.
Energy prices fell 2.1% in the month, with gasoline prices down 3.7%. The other energy components were also generally lower.
Offsetting the energy drop was a 2.2% jump in food prices, led by double digit gains in prices of chicken eggs, vegetables, and finfish, as well as a 2.3% rise in meat prices.
Trade services prices rose 0.2% in the month, while the PPI core rate the BLS prefers, which excludes the change in trade services as well as food and energy, rose 0.4% in March.
The year/year rates for these measures indicated some acceleration. Overall PPI was up 3.0% year/year in March after a 2.8% year/year rise in February.
At the same time, the year/year rate for PPI excluding food and energy rose to 2.7% from 2.5% in February, while the year/year rate for PPI excluding food, energy and trade services rose to 2.9% from 2.7%.
