Producer Prices Climb Year Over Year as Goods Inflation Accelerates
The Producer Price Index for final demand (also known as wholesale prices) rose 0.5% over the month in March, unchanged from the 0.5% increase in February and below expectations. Over the year, producer prices jumped 4.0%, up from 3.4% in February and the largest 12-month increase since February 2023. Meanwhile, prices for final demand excluding foods, energy and trade services ticked up 0.2% over the month in March after rising 0.5% in February. Prices for these goods advanced 3.6% from March 2025.
Within final demand, prices for services were unchanged in March, after advancing 0.3% in February. Meanwhile, prices for goods soared 1.6% in March, the largest monthly increase since August 2023, after moving up 1.0% in February. Within the final demand services index, prices for airline passenger services rose 2.8%, helping offset the 6.0% drop in the margins for food and alcohol wholesaling. Within the final demand goods index, prices for gasoline surged 15.7%, accounting for nearly half of the March increase. At the same time, prices for fresh and dry vegetables fell 10.7% from February but were up 49.0% from March 2025.
Prices for processed goods for intermediate demand rose 2.6% in March, the largest monthly increase since May 2022, after moving up 1.6% in February. Within the index, prices for diesel fuel soared 42.0% after rising 13.1% in February. Meanwhile, prices for primary nonferrous metals and secondary nonferrous metals were up 67.0% and 41.0% year-over-year, respectively. Over the year, prices for processed goods for intermediate demand rose 6.6%, the largest annual increase since November 2022.
Meanwhile, prices for unprocessed goods for intermediate demand decreased 2.6% in March, the largest decline since April 2025, after moving up 4.8% in February. The monthly decline was led by a 51.7% drop in natural gas prices, which are down 8.6% over the year. In contrast, prices for crude petroleum jumped 20.2% in March and 12.3% from March 2025. Over the year, prices for unprocessed goods for intermediate demand rose 4.9% after moving up 3.5% in February.