Producer Price Index Rises 0.7% in March



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 Updated:
4/14/2011 9:00:00 AM

Prices paid to U.S. producers rose 0.7% in March, led by cost increases in energy and light trucks and automobiles, the Labor Department said Thursday.

The increase in prices paid to factories, farmers and other producers followed a 1.6% rise in February that had been the biggest in a year and a half.
 
The so-called core producer price index excluding food and energy rose 0.3%.

The overall PPI reading was smaller than economists’ forecasts, while the core rate was higher than expected, Bloomberg reported.

Food prices declined in March for the first time since August. Fuel jumped 2.6%, led by a 5.7% gain in gasoline prices.

Companies were charged 0.7% more for light trucks, while passenger car prices rose 0.9%, the biggest in more than a year and a half, Bloomberg reported.
 
An increase in the PPI could indicate strong demand for goods, which would mean more shipments for trucking companies. However, if inflation begins to accelerate too quickly, it could also hurt the economy.



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