Inflation, as measured by the producer price index, rose to 2.1% for the year ending in March, the Bureau of Labor Statistics reported on Thursday.
index, rose 0.6 percentage points to 2.1% for the year ending in March, the Bureau of Labor Statistics reported on Thursday, adding to recent data indicating that the Federal Reserve may have to do more to curb price pressures.On a month-to-month basis, the wholesale price index was running at 0.2%, slightly less than expected.
The report comes one day after the even more closely watched consumer price index report showed that inflation accelerated faster than expected. “Inflation isn’t any hotter than it was after yesterday’s shock, and the year-to-year increases are barely registering at 2.1% for final demand producer prices,” said Chris Rupkey, chief economist at FWDBONDS. “It is difficult to know what the proper course for the Fed’s interest rate policy is right now, but certainly, the need to restart its rate hikes, paused since last July, does not seem to be necessary at this juncture.
Annual inflation peaked at about 9% in June 2022, and while it is now much lower than it was, price growth is still running higher than the Fed’s preferred 2% level. The past few months have not seen the rapid disinflation economists hoped for at the start of the year.
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