Washington, DC, Apr. 22--High energy costs and a jump in food prices forced up prices at the wholesale level in March, a delayed government report showed, but inflation continued to be relatively muted.
The producer-price index for finished goods rose a seasonally adjusted 0.5% last month after rising by 0.1% in February, the Labor Department said Thursday. The increase reflected gains in food and energy prices, which rose by 1.5% and 0.6%, respectively.
The closely watched "core" index, which excludes those volatile categories, rose 0.2% after a 0.1% gain in February. Those readings were in line with the expectations of economists polled by Dow Jones Newswires and CNBC.
Although inflation climbed from February levels, the report revealed that inflationary pressures eased on an annual basis. In the 12 months that ended March, producer prices were up 1.4%, slowing from the 2.1% pace recorded in February.
The report backs up the Fed's view that deflation, or broadly falling prices, is no longer a concern. In testimony before Congress this week Federal Reserve Chairman Alan Greenspan said that "worrisome trend" had come to and end.
However, Greenspan also said he didn't see any signs of the opposite trend of broadly rising prices, or inflation. He did note that there were some price pressures "at the earlier stages of the production process and in energy markets."
With inflation under wraps it allows the Fed to keep short-term interest rates low.
The report showed that home heating-oil prices gained 11.0% during the month while gasoline prices rose 1.3% after a 2.0% rise in February. Prices of residential natural gas declined by 0.5% for the month, the largest drop since December.
Prices of fresh and dry vegetables jumped by 13% for the month while prices of beef, veal and dairy products all rose by 3.7%.
Further up the production pipeline, prices of crude, or unprocessed goods, slowed on monthly terms, rising by 0.7% in March after a 2.5% gain February. Prices of intermediate goods also moderated, rising by 0.7% for the month after a 0.9% rise in February.
The Labor Department originally was slated to release March PPI data on April 8, but postponed it because of statistical difficulties encountered while switching to a complex new system of classifying the scores of industries whose prices are reflected in the index.
