Wholesale prices rose 0.2% in March, less than expected

A
measure
of
wholesale
prices
increased
less
than
expected
in
March,
providing
some
potential
relief
from
worries
that

inflation
will
hold
higher
for
longer
than
many
economists
had
expected.

The

producer
price
index
rose
0.2%
for
the
month,
less
than
the
0.3%
estimate
from
the
Dow
Jones
consensus
and
not
as
much
as
the
0.6%
increase
in
February,
according
to

a
release
Thursday
from
the
Labor
Department’s
Bureau
of
Labor
Statistics.

However,
on
a
12-month
basis,
the
PPI
climbed
2.1%,
the
biggest
gain
since
April
2023,
indicating
pipeline
pressures
that
could
keep
inflation
elevated.

Excluding
food
and
energy,
the
core
PPI
also
rose
0.2%,
meeting
expectations.
Excluding
trade
services
from
the
core
level,
the
increase
was
0.2%
monthly
but
2.8%
from
a
year
ago.

The
release
comes
a
day
after
the
BLS
reported
that

consumer
prices
again
rose
more
than
expected
in
March,
raising
concerns
that
the

Federal
Reserve
will
be
unable
to
lower
interest
rates
anytime
soon.

On
the
producer
price
side,
March’s
gain
was
pushed
by
services,
which
saw
a
0.3%
increase
on
the
month.
Within
that
category,
the
index
for
securities
brokerage
and
other
investment-related
fees
jumped
3.1%.

Conversely,
goods
prices
decreased
0.1%,
flipping
a
1.2%
increase
in
February.
Final
demand
costs
for
energy,
which
have
been
on
the
rise
lately,
actually
fell
1.6%
on
the
month.
However,
wholesale
prices
for
final
demand
food
and
goods
less
food
and
energy
climbed
0.8%
and
0.1%,
respectively.

Though
prices
have
been
rising
at
the
pump,
the
final
demand
index
for
gasoline
fell
3.6%.
That
contrasted
with
the
consumer
price
index,
which
showed
gasoline
up
1.7%
on
the
month.

Markets
showed
little
reaction
to
the
data,
with
futures
tied
to
major
stock
indexes
slightly
higher
though
Treasury
yields
declined.

In
other
economic
news
Thursday,

initial
filings
for
jobless
benefits
fell
to
211,000,
a
decline
of
11,000
from
the
previous
week’s
upwardly
revised
level
and
below
the
217,000
estimate
from
Dow
Jones.

Continuing
claims,
which
run
a
week
behind,
increased
to
1.82
million,
up
28,000
for
the
period,
according
to
the
Labor
Department
release.

The
economic
data
points
are
being
watched
closely
as
the
Federal
Reserve
contemplates
its
next
moves
on
monetary
policy.

Wednesday’s
CPI
release
jolted
markets,
which
had
been
anticipating
an
aggressive
series
of
interest
rate
cuts
this
year.
The
report
showed
annual
inflation
running
at
3.5%,
well
above
the
Fed’s
2%
target.

The
market
now
is
pricing
in
the
possibility
of
just
two
cuts
this
year,
likely
not
starting
until
September,
according
to
CME
Group
data.