The Bureau of Labor Statistics reported that producer prices for finished goods were unchanged in March, following February’s 0.4 percent increase led mostly by higher energy costs. Energy prices were down 1 percent, mostly reversing the prior month’s gain. Food costs were 0.2 percent higher.
When food and energy costs are excluded, the core PPI rate rose 0.3 percent. Year-over-year growth rates currently stand at 2.8 percent for finished goods and 2.9 percent for core goods. This represents some easing for finished goods, as the annual growth rate was 4.8 percent in December.
For manufacturers producer prices rose 1.5 percent for the month, with costs up 4.1 percent since March 2011. The yearly change represents continued improvements from previous months. The manufacturing sectors with the largest monthly increases include petroleum and coal products (up 7.7 percent), leather and allied products (up 1.5 percent), wood products (up 0.8 percent) and chemicals (up 0.7 percent).
Intermediate goods costs were 0.7 percent higher, or 0.6 percent at the core rate. Intermediate energy prices rose 1.3 percent. Nonetheless, the year-over-year gains in intermediate goods prices have been falling over the past few months, with the current annual rate of change standing at 2.4 percent. Crude goods prices, on the other hand, fell 2.5 percent, led by declines in energy prices.
Overall manufacturers continue to note elevated pricing pressures with anticipation of further increases in the months ahead.
Tomorrow, the BLS will report data on consumer prices.
Chad Moutray is chief economist, National Association of Manufacturers.