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Apr 13, 2022 10:47AM ET
US dollar is near 2 decades high
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U.S. Producer Prices Leaped Again in March, Well Above Expectations
Published Apr 13, 2022 08:31AM ET
Updated Apr 13, 2022 08:41AM ET
© Reuters
By Geoffrey Smith
Investing.com -- U.S. producer prices surged again in March racing past expectations with their biggest monthly gain in 10 years.
The producer price index rose by 1.4%, compared to expectations for 1.1%. That took the annual rate of inflation for goods leaving U.S. factories to a record high of 11.2%. February's data were also revised up to show an increase of 0.9%, from an initially reported 0.8%.
The data suggests that U.S. producers are still finding it relatively easy to pass on increases in costs for labor and raw materials, rather than accept any compression to their profit margins. Moreover, price increases weren't confined to volatile elements such as food and energy. Even stripped of these, the 'core PPI' index rose 1.0% on the month for the second time in three months, while the annual rate rose to 9.2% from 8.7%.
As such, they raise the pressure on the Federal Reserve to accelerate its planned tightening of monetary policy.
"With a new wave of lockdowns in China and the war in Ukraine raging on...risks to the inflation outlook remain firmly to the upside, reaffirming our view that the Fed must proceed with a faster pace of policy normalization in the months ahead," said Oxford Economics' Mahir Rasheed in a note to clients, adding that he expected the "severe imbalance between robust demand and handicapped supply" to persist throughout the second quarter. Price pressures will only start to abate "in the latter part of 2022," he added.
The numbers came on the same day as JPMorgan (NYSE:JPM) CEO Jamie Dimon warned of "significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine,” although he added that he remained optimistic for the U.S. economy in the short term. JPMorgan's quarterly results showed its lending to corporates rose only 2% on the year in the three months through March, but Dimon noted that the bank is seeing a pick-up in both new loan demand and in the use of revolving credit facilities.
(CORRECTION: The original version of this story incorrectly stated the annual PPI rate. The story has now been amended.)
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Comments (8)
First Last
Apr 13, 2022 10:47AM ET
US dollar are near 2 decades high
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First Last
Apr 13, 2022 10:10AM ET
Russia's invasion of Ukraine "will continue to weigh on the markets"
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Dennis Wozny
Apr 13, 2022 9:26AM ET
Poor policy willContinue to weigh on the markets
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HUNG NGUYEN
Apr 13, 2022 9:24AM ET
IT'S COMPLETELY MEANINGNESS IF JUST FOCUS ONLY ON INFLATION DATA, AS IT 'LL BE CHANGED FROM MONTH TO MONTH, WHY WORRY TOO MUCH !
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HUNG NGUYEN
Apr 13, 2022 9:22AM ET
INVESTORS WILL GET SICK WITH NONSENSE IF CONTINUE MONITORING FOR INFLATION DATA, JUST PUT IT ASIDE AND FOCUS ON EARNING REPORTS, WHICH WOULD BE THE MAIN FACTORS FOR STOCK ORIENTATION
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SunilKumarDixit
Apr 13, 2022 8:53AM ET
USDX awaiting below 100.49
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Jermaine .A
Apr 13, 2022 8:45AM ET
At some point market "experts" are going to realise high rising prices will be the norm until monetary policy is tightened Volcker style.
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