{"id":607793,"date":"2026-04-15T05:21:16","date_gmt":"2026-04-15T05:21:16","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/607793\/"},"modified":"2026-04-15T05:21:16","modified_gmt":"2026-04-15T05:21:16","slug":"ppi-jumps-by-over-6-month-to-month-annualized-for-3rd-month-in-a-row-energy-price-spike-just-latest-wrinkle","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/607793\/","title":{"rendered":"PPI Jumps by over 6% Month-to-Month Annualized for 3rd Month in a Row. Energy Price Spike just Latest Wrinkle"},"content":{"rendered":"

\t\t The hit from energy in March was softened by food and services, which briefly backed off. In prior months, services were the driver.
\nBy\u00a0Wolf Richter<\/a>\u00a0for\u00a0WOLF STREET<\/a>.<\/p>\n

The energy price spike hit inflation at the producer level in March: The overall Producer Price Index final demand (PPI) accelerated sharply to 4.0% compared to a year ago, the worst since February 2023 (red in the chart).<\/p>\n

Month-to-month, the overall PPI jumped by 0.51% (+6.3% annualized), seasonally adjusted. But it had already jumped by 6.1% and 6.8% annualized in February and January before the energy price spike hit (blue in the chart), according to data from the Bureau of Labor Statistics today.<\/p>\n

What\u2019s surprising is that it didn\u2019t jump more. Turns out, there were several factors that kept the March month-to-month increase from blowing out: While energy prices spiked in March from February, prices of food that manufacturers buy fell, and the PPI for services that producers buy, the biggie \u2013 68% of overall PPI \u2013 was nearly unchanged month-to-month after three big increases in a row because its component \u201ctrade services\u201d (accounts for 19% of overall PPI) fell in March from February, the second month of declines, after the two huge spikes in January and December.<\/p>\n

\"\"<\/p>\n

Energy prices are always volatile with big jumps and plunges. The 8.5% spike in March (165% annualized) came on top of the jump in February.<\/p>\n

\"\"<\/p>\n

This pushed the year-over-year increase to 11.2%, from a decline in the prior month.<\/p>\n

The energy PPI is so volatile with such huge spikes and plunges that it\u2019s helpful to look at the price level to gain some perspective (the year-over-year percentage changes just cause uninsured whiplash).<\/p>\n

The chart shows the price level of the energy PPI. The big spike in March pushed the price level to the highest since the September 2023 spike.<\/p>\n

From the peak in mid-2022 through 2025, energy prices plunged but remained far higher than before covid, driven by the soaring costs of electricity.<\/p>\n

\"\"<\/p>\n

The PPI for food that producers buy held down the overall PPI: It fell on a month-to-month basis by 0.27%, after the gigantic spike in February of 2.39%, and the plunge in January.<\/p>\n

On a year-over-year basis, the food PPI accelerated to 1.5%.<\/p>\n

Food prices are also hugely volatile, so it helps to look at the price level. The PPI for food is up by 33% from mid-2020, prices are very high, but they\u2019ve been bumping into a ceiling at these levels, it seems.<\/p>\n

\"\"<\/p>\n

The services PPI barely ticked up 0.05% (+0.6% annualized) in March from February, seasonally adjusted, after the big increases in the prior three months.<\/p>\n

It caused the six-month services PPI to back off to +4.6%, from 5.8% in February, which had been the worst increase since August 2022.<\/p>\n

The services PPI weighs 68% of the overall PPI, and the nearly flat month-to-month reading in March kept the overall PPI from blowing out.<\/p>\n

Within the services PPI:<\/p>\n

Trade services (weigh 19% in overall PPI): -0.3% month-to-month not annualized, second month in a row of declines, after big spikes of +2.0% each in January and December.
\nTransportation & warehousing services (weigh 4.9% in overall PPI) spiked by 1.3% not annualized in March from January, the biggest spike since July.
\nOther services (weighs 38% in overall PPI): +0.1%, after the 0.6% jump in the prior month.<\/p>\n

\"\"<\/p>\n

Year-over-year, the services PPI\u00a0decelerated a hair to +3.7%, after four months in a row of acceleration.<\/p>\n

The low point, the point of the coolest recent services PPI inflation, was in December 2023 at 1.8%. The inflation rate has more than doubled since then.<\/p>\n

Despite the month-to-month squiggles, services prices have been marching relentlessly higher. Since mid-2020, the services PPI has risen by 28%. The chart shows the price level, and its steep trajectory. This is 68% of the overall PPI:<\/p>\n

\"\"<\/p>\n

The PPI for finished core goods (goods without food and energy) rose 0.18% (+2.2% annualized), the slowest increase in a year.<\/p>\n

Year-over-year, the PPI for finished core goods rose by 3.6%, a slight deceleration from the prior two months.<\/p>\n

\"\"<\/p>\n

Core PPI Final Demand,\u00a0which excludes energy and food components, rose by only 0.09% (1.1% annualized) in March from February, seasonally adjusted, held down by the services PPI.<\/p>\n

This small month-to-month increase caused the six-month core PPI to back off a notch to +4.7%, the second worst since August 2022, behind only the +5.5% in February.<\/p>\n

\"\"<\/p>\n

Year-over-year, core PPI\u00a0decelerated a hair to 3.75%.<\/p>\n

\"\"<\/p>\n

Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the mug to find out how:<\/p>\n

\n\"\"<\/a>\n<\/p>\n

\"\"<\/p>\n","protected":false},"excerpt":{"rendered":"The hit from energy in March was softened by food and services, which briefly backed off. In prior…\n","protected":false},"author":2,"featured_media":607794,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-607793","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/607793","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=607793"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/607793\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/607794"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=607793"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=607793"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=607793"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}