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March Producer Prices Disappoint, Drop Most Since August

Despite a modest rise in Final Demand producer prices to 2.3% YoY (from +2.2% YoY), this was a miss..

Highest PPI Final Demand YoY in 5 years…

 

But combined with a 0.1% decline MoM – the biggest drop since August 2016 – suggests the inflationary impulse is fading.

 

The full breakdown shows Core PPI was unchanged, missing expectations of a 0.2% MoM gain (and missing the YoY expectation of a 1.8% gain).

PPI Services: A 4.1-percent drop in the index for loan services (partial) led the March decline in prices for final demand services. The indexes for apparel, footwear, and accessories retailing; securities brokerage, dealing, and investment advice; health, beauty, and optical goods retailing; and truck transportation of freight also moved lower. The indexes for food and alcohol retailing, machinery and equipment parts and supplies wholesaling, and insurance also advanced.

PPI Goods: Leading the March decrease in prices for final demand goods, the gasoline index fell 8.3 percent. Prices for liquefied petroleum gas; jet fuel; hay, hayseeds, and oilseeds; and integrated microcircuits also moved lower. In contrast, the index for motor vehicles rose 0.9 percent.

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