Producer prices rise, but less than forecasters thought

U.S. producer prices rose in March from a year earlier at the fastest pace in nearly a year, but the gain was less than economists expected. And wholesale inflation eased on a month to month basis.

The Labor Department said Thursday its producer price index — which measures inflationary pressure before it reaches consumers — rose 2.1% last month from March 2023, biggest year-over-year jump since April 2023. But economists had forecast a 2.2% increase, according to a survey of forecasters by the data firm FactSet.

And compared to February, wholesale prices were up just 0.2%, down from a 0.6% gain in February and less than the 0.3% uptick economists expected.

The slightly better-than-expected producer price reading came as something of a relief, arriving a day after the Labor Department reported that consumer price inflation was surprisingly hot last month. Wednesday’s numbers had added to worries that progress against inflation was stalling and raised doubts about when the Federal Reserve will cut interest rates.

Stripping out volatile food and energy prices, so-called core wholesale prices were up 0.2% last month from February, the second straight drop, and 2.4% from March 2023. The year-over-year increase in core producer prices was the most since August. Economists see core inflation as a sign of where overall inflation may be headed.

Wholesale goods prices dipped 0.1% from February, pulled down by a 1.6% drop in energy prices. Services prices were up 0.3% for the second straight month.