WASHINGTON – Wholesale prices across the United States climbed at a more moderate pace than anticipated during March, according to federal economic data released Tuesday, though rising energy costs tied to Middle Eastern conflicts continue to fuel inflationary concerns.
The Bureau of Labor Statistics reported that the Producer Price Index for final demand climbed 0.5% last month, matching February’s revised increase. This figure fell short of the 1.1% jump that economists surveyed by Reuters had predicted, following a previously reported 0.7% February gain.
While energy costs surged during the month, unchanged service sector pricing helped balance the overall increase. Analysts note that March data likely captures only the beginning effects of ongoing Middle Eastern tensions.
Year-over-year producer pricing accelerated to 4.0% through March, marking an increase from February’s 3.4% annual rate.
Additional price pressures appear likely as crude oil costs soared beyond $100 per barrel Monday following U.S. military announcements regarding port blockades affecting Iranian shipping operations.
Oil markets have experienced increases exceeding 35% since the U.S.-Israeli conflict with Iran began in late February.
Last week’s Consumer Price Index data revealed the largest monthly jump in nearly four years for March, driven by record increases in gasoline and diesel fuel costs, the Bureau of Labor Statistics noted.
The Federal Reserve monitors Personal Consumption Expenditures price measurements as part of its 2% inflation targeting strategy.
Before Tuesday’s producer price report, economic forecasters projected that core PCE inflation, which excludes volatile food and energy sectors, rose 0.2% in March after two consecutive months of 0.4% increases. This would represent a yearly increase of 3.1%, up from February’s 3.0% rate. Experts anticipate the oil price shock will have measured effects on core inflation measures.
