US producer prices fall 0.1 % in March

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Source:   —  April 13, 2016, at 4:23 PM

S. producer prices fell in March for the fifth time in the past eight months, reflecting a drop in food prices which offset the biggest expand in energy prices in tenth months.

US producer prices fall 0.1 % in March

U. S. producer prices fell in March for the fifth time in the past eight months, reflecting a drop in food prices which offset the biggest expand in energy prices in tenth months. Even with the expand in energy, inflation remained at modest levels.

The Work Dept said Wednesday that its Producer Price Index, which measures cost pressures before they reach consumers, dropped 0.one % in March after a 0.two % decline in February.

Food costs dropped 0.9 % while energy prices increased 1.8 percent, the biggest leap since latest May. The energy expand came after a sustained period of falling prices for gasoline and other energy products.

Overall, producer prices are down 0.1 % over the past twelve months while core prices, which exclude food and energy, are up a modest 1 percent.

The Federal Reserve, which meets at the finish of this month, is expected to leave interest rates unchanged as policymakers look for proof that ultra-low inflation is emotional closer to the Fed's two % target. A key price gauge followed by the Fed has been running below the central bank'south preferred inflation target of 2 % for nearly four years.

The 1.8 % rise in energy costs was the biggest leap since a 5.7 % expand latest May. Starting in July, energy prices began falling again as global oil prices resumed a steep slide that began in mid-2014.

The 0.9 % decline in food costs was led by a 27.1 % plunge in egg prices, the biggest one mo drop since December. The price of vegetables and fruit was also down.

The Fed raised its key interest rate for the first time in nearly a decade in December but left rates unchanged at their meetings in Jan and March. While there had been expectations the Fed would lift rates four times this year, the Fed revised its projections latest mo to indicate only two rate hikes are expected this year.

The cutback in rate hike expectations has occurred because of a slowdown in the global economy and turbulent financial markets at the beginning of the year which prompted concerns about prospects for the U. S. economy.

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