A sign at the corner of 4th and Bryant Street in San Francisco shows premium gas over $7.00 on March 26. Photo by Terry Schmitt/UPI | License Photo
The producer price index for final demand goods and services rose by about half of what was expected in March despite concerns raised by the Iran war.
The U.S. Bureau of Labor Statistics reported Tuesday that wholesale prices increased by 0.5%, down from the 0.7% rate in February. Final demand goods drove the increase as final demand services were unchanged.
Final demand goods had their largest increase since August 2023, climbing 1.6% in March. An increase in the index for energy was the biggest contributor, rising 8.5%.
Without factoring in volatile food and energy, the index increased by 0.2%.
Process and unprocessed goods went in opposite directions. Processed goods for intermediate demand increased by 2.6% while unprocessed goods fell 2.6%. The increase to processed goods was the largest since May 2022, when the index rose 2.8%.
The bureau said more than half of the increase in the processed goods index can be attributed to a 42% increase in diesel fuel prices. Other intermediate fuels also increased,
This week in Washington
Secretary of Defense Pete Hegseth speaks during a press briefing at the Pentagon on Wednesday. Yesterday, the United States and Iran agreed to a two-week ceasefire, with the U.S. suspending bombing in Iran for two weeks if the country reopens the Straight of Hormuz. Photo by Bonnie Cash/UPI | License Photo
while natural gas and electric utilities decreased by 7.2%.
The Dow Jones consensus estimated a 1.1% increase in response to the Iran war.
On an annual basis, the producer price index for all items rose 4%. It is the biggest gain for a 12-month period since February 2023.
While final demand services did not see an index increase overall, airline passenger services increased by 2.8%.
