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Producer Prices: Record Increase

April 13, 2022
Bottom Line:  Producer prices rose even more than expected in March, with year-on-year headline and core price increases exceeding any prior readings for this series, which dates back to 2010 for the current method of calculating prices. Energy drove the headline increase with higher margins in energy services adding to the gains in final demand energy. Margins in the trader and warehousing sector, a source of pipeline price pressures throughout the pandemic, drove the surprise with a record monthly increase.   The indexes for truck transportation of freight, traveler accommodation services; airline passenger services; inpatient care; hardware, building materials, and supplies retailing also increased. Conversely, prices for securities brokerage, dealing, and investment advice decreased 5.4%. Steel mill products also fell for the third consecutive month. Overall, pipeline price pressures remained significant, and there were few signs of easing.
The PPI ROSE by 1.4% in March, compared with market expectations for an increase of 1.1%. Overall producer prices are 11.2% ABOVE the year-ago level.
The Goods
PPI ROSE by 2.3% in March and is now 15.7% ABOVE its year-ago level. Food prices rose by 2.4% and are now 16.2% ABOVE their year-ago level.  Meanwhile, energy prices rose by 5.7%. and are now 36.5% ABOVE their year-ago level. The Goods PPI less food and energy  ROSE by 1.1% and is now 10.0% ABOVE its year-ago level.
The Services
PPI ROSE by 0.9% in March and is now 8.7% ABOVE its year-ago level.
The Core PPI
ROSE by 1.0%, compared with market expectations for a increase of 0.5%.  Core producer prices are now 9.2% ABOVE their year-ago level.
Article by Contingent Macro Advisors