APRIL 20, 2026 – – PRODUCER PRICE INDEX UP 0.5 PERCENT IN MARCH
The producer price index was up a seasonally adjusted 0.5 percent in March, lower than expectations of 1.1 percent; annualized the PCI rose 4 percent. Excluding food and energy, the core PPI was up only 0.1percent for the month, well below the forecasted 0.5 percent. The effects of the rapid increase in oil prices during March pushed up the expectations for much larger increases, which failed to materialize.
Annualized, the 4 percent PPI increase is the largest 12-month gain since February 2023, core PPI is up 3.8 percent for the same period.
When the PPI is combined with the consumer price index, estimates of the March PCE inflation reading will be 3.1 percent (vs. 2.8 percent in February) and 3.5 percent for the core PCE (3 percent in February).
Since the ceasefire, energy prices have eased significantly, and if it holds, the 2026 outlook looks better. The Fed has been cautious about the impact of the war but generally see inflation trending down to their targeted 2 percent. Markets are pricing in a 25 percent chance for one rate cut in 2026.