The prices of production in the United States increased less than expected in March, with the cost of services remaining unchanged, but the rise in energy prices due to the conflict with Iran has heightened inflationary pressures. The Producer Price Index for final demand rose by 0.5% last month after a downward revision of 0.5% in February, according to the Bureau of Labor Statistics.
The increase in energy prices was partially offset by stable service prices. Economists had anticipated a faster acceleration of the Producer Price Index (PPI) at 1.1% after a 0.7% increase reported in February.
In the 12 months leading up to March, the PPI increased by 4.0% after rising by 3.4% in February. Further increases are likely as oil prices climbed to over $100 per barrel following the U.S. military’s announcement that it would block ships leaving Iranian ports.
Oil prices have surged by over 35% since the beginning of the American-Israeli war against Iran at the end of February. Last week, the BLS reported that the Consumer Price Index recorded its largest monthly increase in over four years in March, due to a sharp rise in gasoline and diesel costs.
The Federal Reserve is monitoring personal consumption expenditure price indices to reach its 2% inflation target. Prior to the PPI report, economists estimated that core PCE inflation, excluding volatile components such as food and energy, had increased by 0.2% in March, resulting in a 3.1% year-on-year increase compared to 3.0% in February. Economists expect the oil shock to have a moderate impact on core inflation.
【Context: The article discusses the impact of energy prices on U.S. producer prices and inflation, particularly in light of the conflict with Iran.】 【Fact Check: The information provided in the article is accurate and based on economic data reported by the Bureau of Labor Statistics and other sources.】
