In the US, the Producer Price Index decreased by 0.5% on a monthly basis in March, while it was below expectations with an increase of 2.7% on an annual basis

April 18, 2023

The Producer Price Index for final demand declined 0.5 percent in March, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices were unchanged in
February and increased 0.4 percent in January.  On an unadjusted basis, the index for final demand advanced 2.7 percent for the 12 months ended in March.

In March, two-thirds of the decline in the index for final demand can be attributed to a 1.0-percent decrease in prices for final demand goods. The index for final demand services moved
down 0.3 percent.

Prices for final demand less foods, energy, and trade services edged up 0.1 percent in March after rising 0.2 percent in February. For the 12 months ended in March, the index for final
demand less foods, energy, and trade services increased 3.6 percent.

Final Demand

Final demand goods: Prices for final demand goods decreased 1.0 percent in March after falling 0.3 percent in February. The March decline is attributable to the index for final demand energy, which dropped 6.4 percent. In contrast, prices for final demand goods less foods and energy and for final demand foods advanced 0.3 percent and 0.6 percent, respectively.

Product detail: Eighty percent of the March decline in the index for final demand goods can be traced to an 11.7-percent 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 percent. The indexes for chicken eggs and for meats also moved higher.

Final demand services: Prices for final demand services moved down 0.3 percent in March, the largest decline since falling 0.5 percent in April 2020. Leading the March decrease, margins for final demand trade services dropped 0.9 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) The index for final demand transportation and warehousing services fell 1.3 percent. In contrast, prices for final demand services less trade, transportation, and warehousing edged up 0.1 percent.

Product detail: 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 percent. The indexes for food retailing and for transportation of passengers (partial) also advanced.

Source: U.S. BUREAU OF LABOR STATISTICS
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