PPI for March 2011

The Producer Price Index for finished goods increased 0.7% in March 2011. The PPI measures prices obtained for U.S. goods. Intermediate goods prices increased 1.5% and crude or raw materials prices dropped -0.5% after rising 3.4% in February. PPI is often called wholesale inflation by the press.

The reason finished goods prices increased was energy, up 2.6% in one month. The report notes almost 90% of the wholesale price increase was energy, which includes gas prices. Gas alone rose 5.7% in one month and by itself, was 80% of the finished goods wholesale increase. Food, on the other hand, dropped -0.2%, but these are wholesale prices, so demanding $9 bucks for 10 ounces of some frozen food item heavily advertised on TV will probably remain that high.



Core PPI or finished goods minus food and energy, increased 0.3% for March 2011. There was a 0.7% light truck price increase in core PPI and this was 33% of the total core PPI monthly increase.



Below is the monthly percentage change of finished energy only, to show the increase in prices.



Crude in the Producer Price Index means the items which are used for further processing, or to make other stuff dropped 0.5% in March 2011, yet for the last three month's crude wholesale prices are up 6.2%. Here food really rears it's ugly head in terms of wholesale price inflation, up 0.3% for the month and a whopping 11.7% 3 month increase. Milk alone increased 12.8% in March.

Crude core or crude stuff minus food and energy, decreased 2.3% for March, seems scrap metal prices dropped 2.1% (minus iron related).

For intermediate wholesale goods we have the largest yearly increase, 8.9%, since October 2008.

The broad-based March increase was led by prices for intermediate energy goods, which rose 2.9 percent. The indexes for intermediate goods less foods and energy and for intermediate foods and feeds also were factors in the intermediate
goods advance, moving up 0.9 percent and 2.2 percent, respectively.

For the year, finished goods PPI increased 5.8%, the largest increase since March 2010. Below is the wholesale finished goods PPI percent change for the year.



Below is the indexed price change for all commodities. Commodities are not limited to what comes from inside the United States.



Here is the BLS website for more details on the Producer Price Index.

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