This week isn't just about employment, however. It's also about inflation. And today, we'll be focusing on the impact of inflation on producers. The Producer Price Index is a report that measures the change in manufacturing costs in the United States and, while it isn't a direct measure of inflation (we measure inflation based on consumer costs and,even though producers must consume to get raw materials, they don't count as consumers for this purpose) it is a distinct barometer of inflation trends. Eventually, production costs get passed on to consumers, after all.
The March figures were, well, mixed. PPI for finished goods increased 0.7% in March (beating expectations), although "core" PPI increased 0.3% (missing expectations). PPI for finished foods fell 0.2% (led by fresh and dry vegetables, which dropped 21.4%), but PPI for finished energy rose 2.6% (led by gasoline, which rose 5.7%). PPI for intermediate goods rose 1.5%, and PPI for crude goods fell 0.5%.
The Econoday-surveyed analysts are feeling slightly more optimistic this month, calling for only a 0.6% increase in PPI for finished goods, and only a 0.2% increase in core PPI for finished goods.
And, as always, we turn to the Bureau of Labor Statistics Producer Price Indexes report to see if the analysts are right. And the short answer is that they are not. PPI for finished goods rose 0.8%, with core PPI for finished goods coming in at a 0.3% increase. the PPI for finished foods rose 0.3% (driven by the index for eggs for fresh use, which climbed 56.7%), and the PPI for finished energy rose 2.5% (driven by - wait for it - gasoline, which climbed 3.6%). PPI for intermediate goods is up 1.3%, and PPI for crude goods is up 4.0%.