WASHINGTON — Inflation at the wholesale level slid last month, pulled down by plummeting energy prices.
The Labor Department said Thursday that its producer price index, which measures inflation pressures before they reach consumers, fell 0.1 per cent in March, the first drop since August. Wholesale prices rose 0.3 per cent in February and 0.6 per cent in January. Producer prices were up 2.3 per cent in March from a year earlier, the sharpest annual increase in five years.
Energy prices tumbled 2.9 per cent , including an 8.3 per cent drop in gasoline.
But excluding volatile food and energy prices, so-called core wholesale inflation was unchanged in March and is up just 1.6 per cent over the past year.
"In short, the headline data were held down by the energy component, but the core data were relatively weak as well," Jim O'Sullivan, chief U.S. economist at High Frequency Economics, wrote in a research note. "Even so, the core measures have accelerated a bit over the past year."
The Federal Reserve's target rate for annual inflation is 2 per cent . For several years after the Great Recession ended in 2009, inflation stayed persistently below that level. But a strengthening economy has begun to lift prices.
In part because of signs of rising inflation, the Fed last month raised interest rates for the second time in three months and forecast two more hikes this year.
Paul Wiseman, The Associated Press