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Economy in Brief

U.S. Producer Prices Post Record Increase in March
by Tom Moeller  April 13, 2022

• Energy & food prices again jump.

• Core goods prices accelerate.

• Services prices pick up momentum as well.

The Producer Price Index for Final Demand increased a record 1.4% during March following a 0.9% February gain, revised from 0.8%. The 11.2% increase during the last twelve months also was a record for the series which dates back to November 2009. A 1.1% increase had been expected in the Action Economics Forecast Survey. The PPI excluding food and energy matched its record and rose 1.0% (9.2% y/y) after rising 0.4% in February. Expectations had been for a 0.5% gain. The PPI less food, energy and trade services rose 0.9% (7.0% y/y) after increasing 0.2% in February.

A 5.7% surge (36.7% y/y) in energy prices led last month's increase in the PPI following a 7.5% February rise. Gasoline prices rose 4.9% (59.9% y/y) and added to February's 14.6% surge. Home heating oil prices jumped 20.2% and more than doubled y/y after a 13.6% February rise. Natural gas prices eased 0.4% last month (+22.8% y/y) but the cost of electric power jumped 1.9% (8.4% y/y).

Food prices increased 2.4% in March (16.2% y/y) after rising 2.1% in February. Vegetable prices rose 81.5% y/y while egg prices increased 1.9% y/y. Beef & veal prices fell 7.3% (+16.0% y/y) but the cost of dairy products increased 2.7% (19.3% y/y).

Final demand for goods prices less foods & energy increased 1.1% (10.0% y/y). Finished consumer goods prices less good & energy rose 0.7% in March (7.7% y/y) following a 1.0% increase. Durable consumer goods prices surged 1.0% last month (8.9% y/y) after two straight 0.9% increases. Core nondurable consumer goods prices rose 0.5% (7.0% y/y) following a 1.0% February increase. Prices for private capital equipment jumped 0.9% (8.7% y/y) following two straight 1.0% gains.

Services prices increased 0.9% in March (8.7% y/y) for the third month in the last four. Trade services prices surged 1.2% (17.1% y/y) following four straight months of strong increase. Services prices less trade, transportation & warehousing rose 0.3% in March (3.8% y/y) and reversed the prior month's decline.

Construction product prices rose 0.6% (16.7% y/y) after rising 0.5% in February. Construction costs for private capital investment rose 0.6% (18.2% y/y) for the second consecutive month.

Intermediate goods prices jumped 2.1% (21.7% y/y) due to a 6.4% gain (35.5% y/y) in processed fuel costs.

The PPI data are published by the Bureau of Labor Statistics and can be found in Haver's USECON database. Further detail is contained in PPI and PPIR. The expectations figures are available in the AS1REPNA database.

Producer Price Index (SA, %) Mar Feb Jan Mar Y/Y 2021 2020 2019
Final Demand 1.4 0.9 1.2 11.2 7.0 0.2 1.7
   Excluding Food & Energy 1.0 0.4 0.9 9.2 5.6 0.9 2.1
   Excluding Food, Energy & Trade Services 0.9 0.2 0.8 7.0 5.1 0.7 2.0
   Goods 2.3 2.3 1.6 15.7 10.5 -1.4 0.4
      Foods 2.4 2.1 1.8 16.2 8.8 1.3 1.9
      Energy 5.7 7.5 4.1 36.7 30.2 -12.6 -4.6
    Goods Excluding Food & Energy 1.1 0.8 0.8 10.0 6.5 0.7 1.4
   Services 0.9 0.3 0.9 8.7 5.4 0.9 2.3
      Trade Services 1.2 1.1 1.4 17.1 7.3 1.6 2.4
   Construction 0.6 0.5 3.6 16.7 5.2 2.3 5.0
Intermediate Demand - Processed Goods 2.1 1.5 2.1 21.7 19.4 -2.8 -1.4
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