WASHINGTON -- The federal government reported mixed signals Thursday regarding possible inflation.
The Producer Price Index for final demand declined 0.1 percent in March, seasonally adjusted, the U.S. Bureau of Labor Statistics reported. The decline was the first in seven months after final demand prices advanced 0.3 percent in February and 0.6 percent in January.
But, in a possible signal of inflation, the final demand index rose 2.3 percent for the 12 months ended March 2017, the largest increase since moving up 2.4 percent for the 12 months ended March 2012.
In March 2017, three-fourths of the decrease in the final demand index is attributable to prices for final demand services, which fell 0.1 percent. The index for final demand goods also inched down 0.1 percent.
Prices for final demand less foods, energy, and trade services edged up 0.1 percent in March, the 10th straight advance. For the 12 months ended in March, the index for final demand less foods, energy, and trade services climbed 1.7 percent.
Final demand services: The index for final demand services inched down 0.1 percent in March following a 0.4-percent increase in February. Over half of the broad-based decline can be traced to prices for final demand services less trade, transportation, and warehousing, which decreased 0.1 percent. Margins for final demand trade services also edged down 0.1 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) The index for final demand transportation and warehousing services fell 0.2 percent.
A 4.1-percent drop in the index for loan services (partial) led the March decline in prices for final demand services. The indexes for apparel, footwear, and accessories retailing; securities brokerage, dealing, and investment advice; health, beauty, and optical goods retailing; and truck transportation of freight also moved lower. In contrast, margins for fuels and lubricants retailing jumped 13.8 percent. The indexes for food and alcohol retailing, machinery and equipment parts and supplies wholesaling, and insurance also advanced.
Final demand goods: The index for final demand goods inched down 0.1 percent in March following 6 straight increases. The decline can be traced to a 2.9-percent drop in prices for final demand energy. Conversely, the indexes for final demand goods less foods and energy and for final demand foods rose 0.4 percent and 0.9 percent, respectively.
Product detail: Leading the March decrease in prices for final demand goods, the gasoline index fell 8.3 percent. Prices for liquefied petroleum gas; jet fuel; hay, hayseeds, and oilseeds; and integrated microcircuits also moved lower. In contrast, the index for motor vehicles rose 0.9 percent. Prices for meats, processed poultry, and electric power also advanced.