US wholesale prices fell 0.5% month-on-month in March, contrary to market expectations of a flat | Reuters

WASHINGTON (Reuters) – The U.S. Labor Department’s wholesale price index (PPI) fell 0.5% in March from March, in line with market forecasts compiled by Reuters of a fall to the contrary. This was the biggest drop since April 2020. The drop in gasoline prices was a factor, showing signs of calming down in wholesale prices.

The US wholesale price index fell 0.5% in March, beating market expectations of flatness in a Reuters poll. The drop in gasoline prices was a factor, showing signs of easing in wholesale prices. REUTERS/Kevin Lamarque

February was flat, a revision from an initial report of a 0.1% decrease.

The year-on-year rate of increase in March was 2.7%, the lowest level for two years and two months since January 2021. Market expectations were for a 3.0% increase.

It was up 4.9% in February.

Behind the slowdown in the rate of increase from year to year, there is also the fact that prices have risen sharply in 2022, which is the comparison target.

The 1.0% month-on-month fall in the price of goods (things) in March led the overall decline. Among them, gasoline prices fell by 11.7%. Goods were down 0.3% in February.

Prices of diesel fuel, domestic gas, jet fuel and electricity also fell in March.

Food prices rose 0.6%, while core commodity prices, which exclude food and volatile energy, rose 0.3%. It was up 0.3% in February.

Services prices fell 0.3% in March, the biggest drop in two years and 11 months since April 2020. Trade services fell 0.9% and transport and warehousing fell 1.3%.

Core PPI, which excludes food, energy and trade services, rose 0.1%. It was up 0.2% in February.

Core PPI in March rose 3.6% year on year. It was up 4.5% in February.

The US Department of Labor announced on March 12 that the seasonally adjusted consumer price index (CPI) grew 5.0% year-on-year in March, slowing from 6.0% in the previous month to the lightest since May 2021. It grew.

“The link between PPI and CPI is not as clear as it once was, but if demand slows down enough that companies won’t be able to make up the shortfall in higher profits,” says Chris Lowe, chief economist at FHN Financial “If so, we will see a continued moderate rise (in prices) or a complete fall (in PPI) in March,” he said. “The Fed is already leaning towards holding off on rate hikes, and this PPI, especially when combined with yesterday’s CPI which showed no new problems with inflation, gave a little push to hold off on rate hikes,” he said. rice field


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