US wholesale prices fell last month, according to new data released Friday, indicating that inflationary pressures may not be building as aggressively as expected. The Producer Price Index (PPI) showed a 0.4% drop in March from the previous month, slowing sharply to an annual rate of 2.7%. This reading provides a snapshot before President Donald Trump’s trade policies take full effect.
Economists had predicted monthly prices would rise by 0.2%, but instead, prices slowed down, accelerating only to 3.3% on an annual basis. The drop in PPI is partly due to concerns that the global economy will slow down due to drastic shifts in US trading policy.
Energy and final demand services also showed signs of deflation, with energy prices moving lower than usual due to a supply-demand imbalance and recession concerns weighing on crude oil prices. Final demand services dropped 0.2%, which may indicate weakening economic activity.
However, some welcome news emerged: wholesale food prices dropped 2.1%, and underlying inflation continued to slow. The core PPI fell 0.1% from February, bringing the annual increase to 3.3%. This is the lowest rate since September.
Egg prices paid to producers also declined, reflecting the drop in wholesale prices. While the PPI doesn’t fully correlate with retail-level inflation, a drop in egg prices could indicate that prices at grocery stores may start to fall.
The report’s timing coincides with President Trump’s aggressive trade policies and significant uncertainty in the financial markets. Economists warn that the tariffs will result in higher prices for businesses and consumers and potentially disrupt the global economy.
Source: https://edition.cnn.com/2025/04/11/economy/us-producer-price-index-ppi-inflation-march/index.html