Investing.com – U.S. producer prices increased by slightly less than expected in March, adding to the uncertainty surrounding when the U.S. Federal Reserve will start cutting interest rates.
The for final demand rose 0.2% last month, after rising by 0.6% in February, the Labor Department’s Bureau of Labor Statistics said. Economists had expected the PPI to gain 0.3%.
In the 12 months through January, the increased 2.1%, below the 2.2% expected, after climbing 1.6% in February.
The widely-watched ‘core’ PPI figure, which excludes volatile food and energy prices, rose on the month, for an annual increase of . Economists had expected core PPI to rise 0.2% on the month and 2.3% annually.
This follows on from Wednesday’s hotter than expected consumer price index, amid rises in the costs of gasoline and shelter, climbing to its highest level since last September.
The rose 0.4% last month after advancing by the same margin in February. In the 12 months through March, the increased 3.5%, following a 3.2% rise in February.
The robust data has seen the futures markets price in just 40 basis points of cuts this year, compared to 150 basis points priced in at the start of 2024.
It has also prompted Goldman Sachs to push back its forecast of the first rate cut from June to July.
“We continue to expect cuts at a quarterly pace after that, which now implies two cuts in 2024 in July and November,” analysts at the influential investment bank said, in a note dated April 10.