MNI DATA ANALYSIS: March PPI Rise 0.3% Both Overall and Core>

--March PPI Ex. Food, Energy, Trade +0.4%; Trade Services +0.2%

--PPI +3.0% Y/Y Vs +2.8% In February, Ex Food, Energy +2.7% Vs +2.5%

By Kevin Kastner, Sara Haire, and Holly Stokes

     WASHINGTON (MNI) - Final demand PPI rose by 0.3% in March, well 

ahead of the 0.1% gain expected, with a stronger-than-expected 0.3% gain 

outside of food and energy prices, data released by the Bureau of Labor 

Statistics Tuesday showed. 

     While the gain is partially attributable to a surge in food prices, 

the underlying core measures show that price inflation was solid in 

March.

     The personal consumption price measure in the data, which some 

analysts use a preview measure for CPI and the PCE price index, rose by 

only 0.1% and was up 0.1% ex. food and energy, but rose 0.3% also 

excluding trade services, suggesting some upside risk to the consumer 

inflation data. 

     Within the core, there were notable gains for the prices of cable 

services, hospital care, and motor vehicles, but wireless communications 

services prices fell 1.4%, an echo of the price decline seen in the CPI 

report a year ago. 

--ENERGY, FOOD ROUGHLY OFFSETTING

     Energy prices fell 2.1% in the month, with gasoline prices down 

3.7%. The other energy components were also generally lower. 

     Offsetting the energy drop was a 2.2% jump in food prices, led by 

double digit gains in prices of chicken eggs, vegetables, and finfish, 

as well as a 2.3% rise in meat prices.

     Trade services prices rose 0.2% in the month, while the PPI core 

rate the BLS prefers, which excludes the change in trade services as 

well as food and energy, rose 0.4% in March. 

--Y/Y INFLATION RISING 

     The year/year rates for these measures indicated some acceleration. 

Overall PPI was up 3.0% year/year in March after a 2.8% year/year rise 

in February. 

     At the same time, the year/year rate for PPI excluding food and 

energy rose to 2.7% from 2.5% in February, while the year/year rate for 

PPI excluding food, energy and trade services rose to 2.9% from 2.7%. 

     ** MNI Washington Bureau: 202-371-2121 **

[TOPICS: MAUDS$,M$U$$$,MT$$$$,MAUDR$]