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Posted April 10, 2018

March Producer Price Index advances in March

The Producer Price Index for final demand advanced 0.3 percent in March, seasonally adjusted, the U.S. Bureau of Labor Statistics reports.


Final demand prices rose 0.2 percent in February and 0.4 percent in January. On an unadjusted basis, the final demand index increased 3.0 percent for the 12 months ended in March.

In March, 70 percent of the rise in the final demand index is attributable to a 0.3-percent advance in prices for final demand services. The index for final demand goods also climbed 0.3 percent.

The index for final demand less foods, energy, and trade services rose 0.4 percent in March, the same as in February and January. For the 12 months ended in March, prices for final demand less foods, energy, and trade services increased 2.9 percent, the largest advance since 12-month percent change data were available in August 2014.

Final Demand
Final demand services: Prices for final demand services moved up 0.3 percent in March, the same as in February and January. More than 70 percent of the broad-based advance in March can be traced to the index for final demand services less trade, transportation, and warehousing, which climbed 0.3 percent. Prices for final demand transportation and warehousing services rose 0.6 percent, and the index for final demand trade services increased 0.2 percent. Trade indexes measure changes in margins received by wholesalers and retailers.

Product detail: A major factor in the March advance in prices for final demand services was the index for outpatient care (partial), which climbed 0.4 percent. The indexes for machinery, equipment, parts, and supplies wholesaling; cable and satellite subscriber services; airline passenger services; food and alcohol wholesaling; and hospital inpatient care also moved higher.

In contrast, margins for automotive fuels and lubricants retailing fell 10.4 percent. The indexes for apparel, footwear, and accessories retailing and wireless telecommunications services also decreased.

Final demand goods: Prices for final demand goods moved up 0.3 percent in March after edging down 0.1 percent in February. Most of the increase can be traced to prices for final demand foods, which advanced 2.2 percent. The index for final demand goods less foods and energy climbed 0.3 percent. Conversely, prices for final demand energy declined 2.1 percent.

Product detail: More than half of the March increase in the index for final demand goods is attributable to a 31.5-percent jump in prices for fresh and dry vegetables. The indexes for chicken eggs, meats, unprocessed finfish, motor vehicles, and iron and steel scrap also advanced. In contrast, prices for gasoline fell 3.7 percent. The indexes for primary basic organic chemicals and for fresh fruits and melons also moved lower.

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