The Producer Price Index (PPI) rose less than expected in March amid rising energy prices due to the war in Iran.
The producer price index rose 0.5% during the month, the same as February and less than the 0.6% recorded in January, according to Tuesday (April 14). press release from Bureau of Labor Statistics (Plus).
This number was lower than expected, according to media reports. The Wall Street Journal I mentioned Tuesday Analysts polled expected an increase of 1.1%. And so does Reuters I mentioned The economist surveyed expected a 1.1% rise. Reuters noted that the forecast followed the BLS’s previously announced gain of 0.7% in February. The agency later revised that number to 0.5%.
According to the BLS press release, March’s rise was driven by a 1.6% increase in prices for final order goods, the largest rise since August 2023. Prices for final order services were unchanged during the month of March.
Most of the advance in final demand commodities in March was due to an 8.5% jump in energy final demand prices.
“Nearly half of the March advance in the final demand goods index was attributable to a 15.7 percent rise in gasoline prices,” the BLS said in the statement. “Indices for diesel fuel, jet fuel, home heating oil, meat and primary basic organic chemicals also rose.”
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The Wall Street Journal and Reuters attributed these increases to the war in Iran.
The increase in March brought the 12-month Producer Price Index to 4%, the highest level since the 4.7% recorded in February 2023, according to a Bureau of Labor Statistics release.
The PPI data was released on the same day as the National Federation of Independent Business (NFIB) I mentioned that the Iran war and its subsequent boom Oil prices It led small business optimism below its 52-year average for the first time in a year in March.
Chief Economist at NFIB Bill Dunkelberg “The spike in oil prices has concerned consumers and owners alike. Small business owners must absorb the higher input costs and pass them on to their customers,” he said in a press release on Tuesday.
