US Wholesale Prices Rise 2.1% in March... Highest in 11 Months

CPI Surpasses Expectations Followed by Strong PPI Performance

Following last month's US Consumer Price Index (CPI), the Producer Price Index (PPI), a wholesale price index, rose to its highest level in 11 months.

[Image source= Xinhua News Agency]

According to the US Department of Labor on the 11th (local time), the March PPI increased by 2.1% year-on-year. Although it fell short of the market forecast (2.2%), the increase was significantly larger compared to the previous month (1.6%) and marked the biggest rise since April last year.

The core PPI, which excludes volatile energy and food prices to show the underlying trend of inflation, rose 0.2% month-on-month and 2.4% year-on-year. Market expectations were 0.2% and 2.3%, respectively, with the year-on-year increase exceeding forecasts.

According to the PPI data, service costs have increased for three consecutive months, which is analyzed as a major cause of inflation persistence.

The wholesale price index PPI affects the retail price index CPI with a time lag. Following the strong CPI released the previous day, the robust PPI further strengthens expectations that the Federal Reserve's (Fed) interest rate cut timing will be delayed.