Producer Price Index in March 2022:

The Bureau of Labor Statistics reported Wednesday that prices received by producers of goods and services rose in March at the fastest pace since records were kept.

The Producer Price Index, which measures the prices paid by wholesalers, rose 11.2% from a year ago, the most in a series of data going back to November 2010. On a monthly basis, the measure is up 1.4%, above the 1.1% Dow Jones. Estimate as well as record.

After excluding food, energy and trade services, core PPI rose 0.9% month over month, nearly double the 0.5% estimate and the largest monthly gain since January 2021. Core PPI rose 7% year over year. ..

The Producer Price Index is a forward-looking inflation measure because it tracks prices in the pipeline for goods and services that ultimately reach consumers.

Wednesday’s release comes the day after the BLS report that the CPI for March rose 8.5% over the past year, above expectations and the highest reading since December 1981.

From the producers’ side, prices of final wanted goods led a monthly increase of 2.3%, while prices of services rose 0.9%, up sharply from the 0.3% increase in February. Inflation of goods outpacing services during covid pandemicbut March numbers suggest that services are now catching up with changing consumer demand.

Energy prices were the biggest gainer during the month, up 5.7%, while food costs were up 2.4%.

The ballooning inflation prompted the Federal Reserve to start tightening monetary policy.

In March, the Fed raised its benchmark short-term borrowing rate by 0.25 percentage points as a first step in what is expected to be a series of hikes during the year. Markets are pricing in almost certainty that the central bank will double that move at its May meeting, and continue until the Fed funds rate is around 2.5% by the end of the year.

Markets initially showed no reaction to the PPI news, stock markets futures hovered around flat and Treasury yields changed little.