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The
Labor Department said on Wednesday its producer price index
slipped 0.1 percent last month after dropping 0.2 percent in
February. In the 12 months through March, the PPI dipped 0.1
percent after being unchanged in February.
Economists polled by Reuters had forecast the PPI advancing 0.2
percent last month and gaining 0.3 percent from a year ago.
Weak producer prices suggest overall inflation will remain below
the Fed's 2 percent target for a while. Tame inflation is a key
factor in the U.S. central bank's policy of gradually raising
interest rates even as the labor market tightens.
The Fed hiked its benchmark overnight interest rate in December
for the first time in nearly a decade and policymakers recently
forecast only two more rate hikes this year.
Inflation has been dampened by a buoyant dollar and cheaper oil
prices. Last month, energy prices rose 1.8 percent, with
gasoline prices surging 7.1 percent in what was the largest
increase since May 2015. Energy prices fell 3.4 percent in
February.
Wholesale food prices fell 0.9 percent last month. Prices for
services fell 0.2 percent, the first decline since October,
after being unchanged in February.
A 0.5 percent drop in margins for final demand trade services
accounted for more than 80 percent of the decline in prices for
services.
A key measure of underlying producer price pressures that
excludes food, energy and trade services was unchanged last
month after edging up 0.1 percent in February.
The so-called core PPI was up 0.9 percent in the 12 months
through March after rising by the same margin in February.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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