Biggest fall since pandemic
Durrant Pate / Contributor
US producer prices fell in March by the highest margin since the start of the pandemic, driven by a decline in gasoline costs that have helped slow inflationary pressures.
The Producer Price Index (PPI) for final demand declined by 0.5% from a month earlier, according to data released by the Bureau of Labor Statistics (BLS). Final demand prices were unchanged in February and increased 0.4% in January.
The BLS reports that on an unadjusted basis, the PPI for final demand advanced 2.7% for the 12 months that ended in March. In March, two-thirds of the decline in the index for final demand is due to a 1.0% fall in prices for final demand goods.
According to the BLS, “the index for final demand services moved down 0.3%. Prices for final demand fewer foods, energy, and trade services edged up 0.1% in March after rising 0.2% in February. For the 12 months that ended in March, the index for final demand fewer foods, energy, and trade services increased 3.6%. “
Final demand prices down 1%
Prices for final-demand goods fell by 1.0% in March after falling 0.3% in February. The March decline is attributable to the index for final demand energy, which dropped 6.4%.
In contrast, prices for final demand goods fewer foods, and energy and for final demand foods advanced 0.3% and 0.6%, respectively. Eighty percent of the March decline in the index for final demand goods can be traced to an 11.7% drop in prices for gasoline.
The indexes for diesel fuel, residential natural gas, jet fuel, electric power, and fresh and dry vegetables also fell. Conversely, prices for light motor trucks increased 0.7%. The indexes for chicken eggs and meats also moved higher.
The BLS says the prices for final demand services moved down 0.3% in March, the largest decline since falling 0.5% in April 2020. Leading the March decrease, margins for final demand trade services dropped 0.9%.
The index for final demand transportation and warehousing services fell 1.3%. In contrast, prices for final demand services less trade, transportation, and warehousing edged up 0.1%.
Margins for machinery and vehicle wholesaling dropped
A 7.3-percent drop in margins for machinery and vehicle wholesaling was a major factor in the March decrease in prices for final demand services. The indexes for truck transportation of freight, portfolio management, fuels, and lubricants retailing, loan services (partial), and automobiles and automobile parts retailing also moved down.
Conversely, prices for guestroom rental rose 4.6%. The indexes for food retailing and for transportation of passengers (partial) also advanced.
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