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 producer price index 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 PPI 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 0.2% on the month, an annual increase of 2.4%.
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 consumer price index rose 0.4% last month after advancing by the same margin in February. In the 12 months through March, the CPI 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 (NYSE:GS) 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.