The Producer Price Index (PPI), which measures the prices that producers receive for their goods and services, delivered very happy news. On a m/m basis, PPI plummeted a dramatic -0.5%, blowing past expectations of 0.0%. It was the biggest decline since just after the pandemic started in April of 2020. The results on a y/y basis were even more startling, nosediving from 4.9% in February to 2.7% in March. That’s a breathtaking descent in one month. Furthermore, over the course of the past year, the PPI has fallen a gigantic 9% from 11.7% last March. Progress is being made.
The core rate (Final Demand Less Foods, Energy, and Trade Services) also delivered inspiration, as the y/y rate fell from 4.8% to 3.7%Â Looking at the individual industries on a m/m basis, prices in the energy industry fell -6.4%, driven by a huge -11.7% drop in gasoline prices. Energy also had the largest decline on a y/y basis at -7.2% while construction gained an outsized 15.6% over the year.