Producer Prices Rise 0.5%; But It's Too Soon to Say Whether Pickup Augurs an Inflation Increase
WASHINGTON--A gauge of U.S. inflation surged in March, driven by volatile categories that may not push broader price measures out of their long stretch of sluggishness.</br></br>The producer-price index for final demand, which measures changes in the prices businesses receive for their goods and services, rose a seasonally adjusted 0.5% from February, the Labor Department said Friday. It rose 0.6% excluding the volatile categories of food and energy.</br></br>Economists surveyed by The Wall Street Journal had expected the index to rise a more modest 0.1%, and predicted a 0.2% increase excluding food and energy. It had fallen 0.1% in February.</br></br>The index was up 1.4% in March from a year earlier, the biggest year-over-year increase since last August.</br></br>"It could be that the difficult weather over the past few months has distorted prices, and wholesale inflation will settle down in April," PNC chief economist Stuart Hoffman wrote in a note to clients. "But there is also the possibility that inflation may be picking up, as firms raise prices given the recent limited acceleration in wage growth and stronger demand."