Sunday, January 25th4.9°C
24779
24285

US producer prices increase in March on gains for food, clothing, jewelry and chemicals prices

WASHINGTON - The prices companies receive for their goods and services jumped in March led by gains for food, clothing, jewelry and chemicals.

The producer price index, which measures price changes before they reach the consumer, rose 0.5 per cent in March, the Labor Department said Friday.

Overall inflation remains relatively tame. Producer prices increased 1.4 per cent during the past 12 months.

Wholesale food prices rose last month, led by a 30.4 per cent leap in the costs of hogs and 12.4 per cent increase in poultry. Those increases were partially offset by a 2.4 per cent decline in gasoline prices and a 0.7 per cent drop for electric power. Excluding the volatile categories of food, energy and retailer and wholesaler profit margins, core prices ticked up 0.3 per cent.

Some of the higher prices were due to a "distortion caused by the unusually bad weather" in previous months, said Paul Dales, senior US economist at Capital Economics. Snowstorms kept many shoppers at home and hurt retail sales. The margins of clothing wholesalers and retailers bounced back in March, rising by 3.3 per cent to push up overall producer prices.

Inflation has been near historic lows during the past two years. The producer price index rose just 1.2 per cent in 2013 after a 1.4 per cent increase in 2012. Both figures are far below the Fed's preferred target of 2 per cent.

Stronger growth usually leads to higher levels of inflation. But the economy has struggled to accelerate during the 4 1/2-year recovery from the Great Recession. Wage growth has been close to flat, while unemployment remains at historically high levels. This limits consumer spending and limits the ability of businesses to raise prices.

Low inflation has enabled the Federal Reserve to pursue extraordinary stimulus programs to boost spending, hiring and overall economic growth.

The Fed has begun to unwind some of that stimulus, although it intends to prolong its near zero short-term interest rates, in part, because inflation has been so low. The U.S. central bank has cut its monthly bond purchases to $55 billion, down from $85 billion last year. The bond purchases are aimed at lowering long-term interest rates to bolster growth.

The economy has started to improve after a winter slowdown. Employers added 192,000 jobs in March and 197,000 in February, according to a government report issued last week. Snowstorms and freezing temperatures cut into job gains in December and January.

Hiring over the past two months suggests the economy may be gaining steam with the start of spring, likely encouraging the Fed to continue reducing its stimulus despite concerns about low inflation.

The Canadian Press


Read more Business News

23015


Recent Trending




Today's Market
S&P TSX14779.35+15.369
S&P CDNX678.18-0.79
DJIA17672.60-141.38
Nasdaq4757.879+7.481
S&P 5002051.82-11.33
CDN Dollar0.8039-0.0011
Gold1292.60-2.00
Oil46.35-2.34
Lumber311.50+6.50
Natural Gas2.986+0.132

 
Okanagan Companies
Pacific Safety0.115-0.005
Knighthawk0.010.00
QHR Technologies Inc1.38+0.06
Cantex0.035+0.005
Anavex Life Sciences0.1810.00
Metalex Ventures0.040.00
Russel Metals24.48+0.32
Copper Mountain Mining1.10-0.02
Colorado Resources0.155+0.005
ReliaBrand Inc0.006+0.001
Sunrise Resources Ltd0.055+0.03
Mission Ready Services0.22+0.02

 



24393

FEATURED Property
21827512340, 2350, 2360 Benvoulin Road
$1,500,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


How to price: workbook approach

In 2008 Self Counsel Press published my book - Pricing Strategies for Small Business. The book is now available in Europe, India, Russia and the United States. The purpose of the book was to make avai...


Ailing Parents: Tax Issues

If your parent has become ill, there can be several tax issues that come into play depending on the nature of their illness, their age and the role that family members are playing. For example, if you...


What do I pay ICBC for anyway?

If you have had ongoing dealings with ICBC as a result of a car accident than you have likely had the pleasure of dealing with at least two sides of ICBC. Initially the relationship starts off pleasan...

_



24709




Member of BC Press Council


24598