Producer prices in the U.S. jumped by much more than expected in the month of March, according to a report released by the Labor Department on Friday.
The Labor Department said its producer price index for final demand surged up by 1.0 percent in March after climbing by 0.5 percent in February. Economists had expected another 0.5 percent increase.
The bigger than expected advance in producer prices reflected another spike in energy prices, which soared by 5.9 percent in March after skyrocketing by 6.0 percent in February.
Excluding prices for food, energy, and trade services, core producer prices rose by 0.6 percent in March after edging up by 0.2 percent in February. Economists had expected another 0.2 percent uptick.
The report showed prices for final demand services climbed by 0.7 percent in March after inching up by 0.1 percent in February.
Prices for transportation and warehousing services shot up by 1.5 percent, while prices for trade services jumped by 1.0 percent and prices for other services rose by 0.4 percent.
Meanwhile, the Labor Department said the annual rate of producer price growth spiked to 4.2 percent in March from 2.8 percent in February.
Core producer prices in March were up by 3.1 percent compared to a year ago, reflecting a significant acceleration from the 2.2 percent increase in the previous month.
"The fiscally stimulated revival of consumer demand and strong base effects will lead to faster annual inflation rates in the spring," said Mahir Rasheed, Associate U.S. Economist at Oxford Economics.
He added, "However, these should be temporary dynamics, and we continue to expect the Fed to remain accommodative through mid-2023."
Next Tuesday, the Labor Department is scheduled to release a separate report on consumer price inflation in the month of March.
Consumer prices are expected to climb by 0.5 percent in March after rising by 0.4 percent in February. Core consumer prices are expected to edge up by 0.2 percent.
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