PPI index up 1.1% over past year, lowest in 8 months
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — Producer prices fell 0.6% in March as energy costs retreated after a sharp gain in the prior month, according to government data released Wednesday.
This is the biggest one-month drop in wholesale prices since last May.
Energy prices fell 3.4% in March after a 3% gain in February. This offset a 0.8% rise in food prices.
Excluding food and energy, core PPI rose 0.2% for the third-straight month. About a quarter of the increase came from prices for civilian aircraft, which rose 0.7%, the department said.
Economists polled by MarketWatch had expected a 0.3% monthly fall in headline PPI and a 0.2% gain in core producer prices. See comprehensive MarketWatch calendar.
In a separate report, the Commerce Department said retail sales fell by the biggest amount in nine months in March.
Details
Producer prices of intermediate goods such as flour or cotton yarn, which have been processed but require further processing, fell 0.9% in March, the biggest drop since October 2011.
Core intermediate goods, watched by the Federal Reserve for signs of inflation, rose 0.2% in March.
Prices for crude goods like grains, livestock and crude petroleum not fabricated or manufactured and not sold to consumers, fell 2.5%.
Taken over 12 months, producer prices are up 1.1% in March, down from a 1.7% increase in February. This is the smallest year-over-year advance since last July.
Core prices were up 1.7% in March, the same as February. Year-over-year core prices have come down steadily after rising 3.1% in January 2012.
In others sign of tame inflation, intermediate prices are down 0.8% over the past year and crude good prices have dropped 0.3% over the same period.
Greg Robb is a senior reporter for MarketWatch in Washington. Follow him on Twitter @grobb2000.
