Wholesale Prices in U.S. Climbed More Than Forecast in March

(Bloomberg) -- U.S. wholesale prices advanced in March by more than forecast, reflecting broad increases in the costs of services and goods, a Labor Department report showed Tuesday in Washington.

Key Takeaways

The figures, which measure wholesale and other selling prices at businesses, reaffirm the broad view that cost pressures in the production pipeline continue to firm up. Proposed tariffs also threaten to raise costs of imported materials for U.S. manufacturers.

The report showed 0.3 percent gains in the costs of goods and services. About 70 percent of the March increase was due to final demand services. Costs for cable and satellite subscriber services jumped 3.6 percent, the most in records to January 2009. Expenses also increased for outpatient care, airline services, rail transportation and trucking. Margin costs grew for wholesalers and retailers, the report showed.

Some economists prefer looking at the PPI excluding food, energy, and trade services, because it strips out the most volatile components of the inflation gauge.

Some other measures show inflation is making progress as the Federal Reserve anticipates. Policy makers raised the benchmark interest rate in March and are expected to lift borrowing costs at least two more times this year.

Other Details

• Excluding the volatile categories of food, energy, and trade services, producer costs rose 0.4 percent for a third month
• Energy prices dropped 2.1 percent; food costs rose 2.2 percent, the most since April 2014
• Prices for final demand transportation and warehousing services increased 0.6 percent

--With assistance from Jordan Yadoo

To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net.

To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Vince Golle

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