March 2024 Producer Price Index

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The Producer Price Index for final demand rose 0.2 percent in March, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved up 0.6 percent in February and 0.4 percent in January. (See table A.) On an unadjusted basis, the index for final demand increased 2.1 percent for the 12 months ended in March, the largest advance since rising 2.3 percent for the 12 months ended April 2023.

The March increase in the index for final demand is attributable to a 0.3-percent rise in prices for final demand services. In contrast, the index for final demand goods edged down 0.1 percent.

The index for final demand less foods, energy, and trade services moved up 0.2 percent in March after rising 0.3 percent in February. For the 12 months ended in March, prices for final demand less foods, energy, and trade services increased 2.8 percent.

Final Demand

Final demand services: The index for final demand services moved up 0.3 percent in March, the third consecutive rise. Leading the broad-based March increase, prices for final demand services less trade, transportation, and warehousing advanced 0.2 percent. The indexes for final demand trade services and for final demand transportation and warehousing services moved up 0.3 percent and 0.8 percent, respectively. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: A major factor in the March increase in prices for final demand services was the index for securities brokerage, dealing, investment advice, and related services, which rose 3.1 percent. The indexes for professional and commercial equipment wholesaling; airline passenger services; investment banking; deposit services (partial); and computer hardware, software, and supplies retailing also moved higher. Conversely, prices for traveler accommodation services decreased 3.8 percent. The indexes for automobiles retailing (partial) and for machinery and equipment parts and supplies wholesaling also fell. (See table 2.)

Final demand goods: Prices for final demand goods decreased 0.1 percent in March after rising 1.2 percent in February. The decline is attributable to the index for final demand energy, which moved down 1.6 percent. In contrast, prices for final demand foods and for final demand goods less foods and energy advanced 0.8 percent and 0.1 percent, respectively.

Product detail: Leading the March decline in the index for final demand goods, prices for gasoline decreased 3.6 percent. The indexes for chicken eggs, carbon steel scrap, jet fuel, and fresh fruits and melons also fell. Conversely, prices for processed poultry jumped 10.7 percent. The indexes for fresh and dry vegetables, residential electric power, and motor vehicles also moved higher.

Intermediate Demand by Commodity Type

Within intermediate demand in March, prices for processed goods declined 0.5 percent, the index for unprocessed goods fell 1.9 percent, and prices for services rose 0.2 percent. (See tables B and C.)

Processed goods for intermediate demand: In March, the index for processed goods for intermediate demand moved down 0.5 percent, the largest decline since falling 0.7 percent in November 2023. Leading the March decrease, prices for processed energy goods dropped 1.5 percent. The index for processed materials less foods and energy moved down 0.4 percent. In contrast, prices for processed foods and feeds advanced 0.6 percent. For the 12 months ended in March, the index for processed goods for intermediate demand fell 1.7 percent.

Product detail: A major factor in the March decline in prices for processed goods for intermediate demand was the index for natural gas to electric utilities, which decreased 6.4 percent. Prices for ethanol, cold rolled steel sheet and strip, gasoline, commercial electric power, and prepared animal feeds also fell. Conversely, the index for processed poultry jumped 10.7 percent. Prices for primary basic organic chemicals and for diesel fuel also rose.

Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand moved down 1.9 percent in March following a 0.7-percent decline in February. The March decrease can be attributed to prices for unprocessed energy materials, which fell 6.9 percent. In contrast, the index for unprocessed foodstuffs and feedstuffs advanced 2.2 percent, and prices for unprocessed nonfood materials less energy increased 0.2 percent. For the 12 months ended in March, the index for unprocessed goods for intermediate demand dropped 7.1 percent.

Product detail: Leading the March decrease in prices for unprocessed goods for intermediate demand, the index for natural gas dropped 37.0 percent. Prices for carbon steel scrap, slaughter chickens, crude petroleum, fresh fruits and melons, and ungraded chicken eggs also fell. Conversely, the index for livestock increased 5.4 percent. Prices for nonferrous metal ores and for corn also rose.

Services for intermediate demand: Prices for services for intermediate demand moved up 0.2 percent in March after no change in February. The advance can be traced to a 0.3-percent increase in the index for services less trade, transportation, and warehousing for intermediate demand. Both margins for trade services for intermediate demand and prices for transportation and warehousing services for intermediate demand were unchanged. For the 12 months ended in March, the index for services for intermediate demand rose 3.6 percent.

Product detail: More than half of the March increase in the index for services for intermediate demand can be attributed to a 3.1-percent advance in prices for securities brokerage, dealing, investment advice, and related services. The indexes for investment banking; metals, minerals, and ores wholesaling; deposit services (partial); gross rents for office buildings; and airline passenger services also moved higher. In contrast, prices for television advertising time sales fell 8.4 percent. The indexes for arrangement of freight and cargo transportation and for machinery and equipment parts and supplies wholesaling also decreased.

Intermediate Demand by Production Flow

Stage 4 intermediate demand: Prices for stage 4 intermediate demand moved up 0.2 percent in March, the fifth consecutive rise. In March, the index for total services inputs to stage 4 intermediate demand advanced 0.4 percent. In contrast, prices for total goods inputs declined 0.2 percent. Increases in the indexes for securities brokerage, dealing, investment advice, and related services; investment banking; processed poultry; metals, minerals, and ores wholesaling; gross rents for office buildings; and food and alcohol wholesaling outweighed decreases in the indexes for gasoline; machinery and equipment parts and supplies wholesaling; and gross rents for retail properties. For the 12 months ended in March, prices for stage 4 intermediate demand rose 2.1 percent.

Stage 3 intermediate demand: Prices for stage 3 intermediate demand were unchanged in March after increasing 1.0 percent in February. In March, the index for total goods inputs to stage 3 intermediate demand edged down 0.1 percent, while the index for total services inputs was unchanged. Falling prices for jet fuel, slaughter chickens, arrangement of freight and cargo transportation, cold rolled steel sheet and strip, and television advertising time sales offset advances in the indexes for livestock; raw milk; primary basic organic chemicals; corn; and metals, minerals, and ores wholesaling. For the 12 months ended in March, prices for stage 3 intermediate demand decreased 0.4 percent.

Stage 2 intermediate demand: The index for stage 2 intermediate demand decreased 1.3 percent in March, the largest decline since falling 1.4 percent in May 2023. In March, prices for total goods inputs to stage 2 intermediate demand dropped 3.1 percent, while the index for total services inputs was unchanged. Declining prices for gas fuels, carbon steel scrap, broadcast and network television advertising time sales, ethanol, crude petroleum, and arrangement of freight and cargo transportation outweighed increases in the indexes for deposit services (partial), primary basic organic chemicals, and nonferrous metal ores. For the 12 months ended in March, prices for stage 2 intermediate demand fell 0.4 percent.

Stage 1 intermediate demand: The index for stage 1 intermediate demand edged down 0.1 percent in March after increasing 0.4 percent in February. In March, prices for total goods inputs to stage 1 intermediate demand declined 0.7 percent. Conversely, the index for total services inputs moved up 0.5 percent. Decreasing prices for carbon steel scrap, ethanol, traveler accommodation services, natural gas to electric utilities, and cold rolled steel sheet and strip outweighed increases in the indexes for securities brokerage, dealing, investment advice, and related services; investment banking; primary basic organic chemicals; and metals, minerals, and ores wholesaling. For the 12 months ended in March, prices for stage 1 intermediate demand advanced 0.2 percent, the first increase since rising 0.7 percent in the 12 months ended March 2023.