US producer prices jump by 1% in March, largest increase in almost 10 years

Author: Adam Yanelli

2021/04/09

HOUSTON (ICIS)--The US seasonally adjusted producer price index (PPI) for final demand surged by 1.0% in March, from February, the US Bureau of Labor Statistics (BLS) reported on Friday.

Source: US Bureau of Labor Statistics

For the 12 months ended in March, the final demand index moved up 4.2% compared with the previous 12 months, which the BLS said was the largest advance since rising 4.5% for the 12 months ended September 2011.

The data could support concerns from some that inflation could become a larger threat.

RPM International said this week it expects to spend the next two quarters implementing price increases to catch up with inflation.

The Associated General Contractors of America (AGC), a trade group, issued a construction inflation alert, saying that the construction industry is currently experiencing an unprecedented mix of steeply rising materials prices, snarled supply chains, and staffing difficulties.

“Today’s producer price index report documents just some of challenges contractors are experiencing with fast-rising materials costs, lengthening or uncertain delivery times, and rationing of key inputs,” said Ken Simonson, the association’s chief economist. “These problems threaten to drive up the cost and completion time for many vital projects and potentially set back the recovery in construction employment.”

Source: US Bureau of Labor Statistics

The BLS said almost 60% of the March increase is attributable to a 1.7% boost in prices for final demand goods. The index for final demand services moved up 0.7%.

Seasonally adjusted final demand energy rose by 5.9% in March from February, the data showed.

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