U.S. producer prices unexpectedly fall in March

U.S. producer prices unexpectedly fell in March as the cost of gasoline declined, and there were signs that underlying producer inflation was subsiding.

The producer price index for final demand dropped 0.5% last month, the Labor Department said on Thursday. Data for February was revised to show the PPI unchanged instead of slipping 0.1% as previously reported.

In the 12 months through March, the PPI increased 2.7%. That was the smallest year-on-year rise since January 2021 and followed a 4.9% advance in February. The annual PPI rate is subsiding as last year’s large increases drop out of the calculation.

Economists polled by Reuters had forecast the PPI unchanged on the month and climbing 3.0% year-on-year.

The government reported on Wednesday that overall consumer prices barely rose in March. While underlying inflation remained hot, rents rose at their slowest pace in nearly a year.