U.S. Producer Price Index for final demand declined 0.5% in March, seasonally adjusted. Final demand prices were unchanged in February and increased 0.4% in January. On an unadjusted basis, the index for final demand advanced 2.7% for the 12 months ended in March, as the U.S. Bureau of Labor Statistics reported.
In March, two-thirds of the decline in the index for final demand can be attributed to a 1.0% decrease in prices for final demand goods. The index for final demand services moved down 0.3%.
Prices for final demand less foods, energy, and trade services edged up 0.1% in March after rising 0.2% in February. For the 12 months ended in March, the index for final demand less foods, energy, and trade services increased 3.6%.
Final demand goods: Prices for final demand goods decreased 1.0% in March after falling 0.3% in February. The March decline is attributable to the index for final demand energy, which dropped 6.4%. In contrast, prices for final demand goods less foods and energy and for final demand foods advanced 0.3% and 0.6%, respectively.
Product detail: 80% of the March decline in the index for final demand goods can be traced to an 11.7% drop in prices for gasoline. The indexes for diesel fuel, residential natural gas, jet fuel, electric power, and fresh and dry vegetables also fell. Conversely, prices for light motor trucks increased 0.7%. The indexes for chicken eggs and for meats also moved higher.
Final demand services: Prices for final demand services moved down 0.3% in March, the largest decline since falling 0.5% in April 2020. Leading the March decrease, margins for final demand trade services dropped 0.9%. (Trade indexes measure changes in margins received by wholesalers and retailers.) The index for final demand transportation and warehousing services fell 1.3%. In contrast, prices for final demand services less trade, transportation, and warehousing edged up 0.1%.
Product detail: A 7.3% drop in margins for machinery and vehicle wholesaling was a major factor in the March decrease in prices for final demand services. The indexes for truck transportation of freight, portfolio management, fuels and lubricants retailing, loan services (partial), and automobiles and automobile parts retailing also moved down. Conversely, prices for guestroom rental rose 4.6%. The indexes for food retailing and for transportation of passengers (partial) also advanced.
