The prices of American producers won their first monthly decline in almost 1-1 / 2 years in March while petrol prices plunged during the last month preceding the American prices on imported goods, the Labor Department announced on Friday.
The producers’ price index for final demand dropped 0.4% last month after an upward gain of 0.1% in February, said the Labor Department’s Labor Statistics Office.
The economists interviewed by Reuters had planned that the PPI increases by 0.2% after an unchanged reading previously reported in February.
During the 12 months to March, the PPI increased by 2.7% after having advanced 3.2% in February.
A 0.9% drop in goods prices represented more than 70% of the drop in monthly PPI. Last month’s drop in goods prices has been the largest since October 2023 and followed a 0.3% gain in February.
The prices of the goods were depressed with a fall of 11.1% of the cost of gasoline.
The concerns about larger global economic growth due to commercial wars have weighed on oil prices.
The prices of wholesale foods dropped by 2.1% in the middle of a decrease in eggs, beef and veal as well as fresh and dry vegetables.
But Steel Mill products have jumped 7.1%.
Excluding volatile power and energy components, goods prices increased by 0.3% for a second consecutive month.
Trade tensions have intensified between the United States and China, the main source of imports, posing a risk that inflation increases in the coming months.
President Donald Trump increased tasks on Chinese products to 125%this week, even if he has delayed reciprocal rates on other business partners for 90 days.
On Friday, Beijing retaliated with a rate of 125%.
Trump has maintained a general right of 10% on almost all American imports as well as a 25% price on motor vehicles, steel and aluminum.
“The report on the PPIs of Mars indicates almost nothing on the prospects for inflation, which depends massively on the prices,” said Bill Adams, chief economist of the Comerica Bank. “Inflation will accelerate considerably if the prices remain in place.”
The expected increase in inflation could, however, be somewhat tempered by softening domestic demand, obvious in the Mars consumer prices report which showed a monthly drop in airline prices as well as prices of hotel and motel rooms.
This was reproduced in the PPI report.
The wholesale prices of airlines fell 4.0% after being unchanged in February, while the cost of hotel and Motel rooms dropped by 1.2%.
The drop more than compensating for moderate increases in portfolio management fees and health costs, which resulted in a drop in prices for services by 0.2% after being unchanged in February.
Portfolio management fees, health care, hotel and motel housing and airlines are among the components that enter into the calculation of the basic personal consumer expenses index, one of the inflation measures followed by the Federal Reserve for its target of 2%.
Economists estimated that the basic PCE price index increased by 0.1% in March after jumping 0.4% in February.
This would slow the annual increase in central inflation to 2.6%, compared to 2.8% in February.
The dollar fell against a basket of currencies. The American treasure gives Rose.
The prices, which hammered the financial markets and stimulated the expectations of consumer inflation, have increased the chances of a recession in the next 12 months. The feeling of consumers and companies also sang.
The report of Reunion from Reunion from March 18 to 19 of the American central bank published on Wednesday showed that decision-makers were almost unanimous that the economy was facing risk of inflation and slower growth simultaneously.
The financial markets expect the Fed to regain the reduction in interest rates in June after having taken a break in January and reduces its policy rate by 100 basic points this year.
The Fed benchmark interest rate is currently between 4.25% and 4.50%.
