The Producer Price Index was unexpectedly weak again in March. 
The BLS Reports …
PPI Month-Over-Month Details
- The Producer Price Index for final demand decreased 0.4 percent in March, seasonally adjusted.
- Over 70 percent of the decrease in the index for final demand can be traced to prices for final demand goods, which fell 0.9 percent.
- The index for final demand services declined 0.2 percent.
- Prices for final demand less foods, energy, and trade services edged up 0.1 percent in March after increasing 0.4 percent in each of the previous 3 months.
Final Demand Goods Details
- Prices for final demand goods moved down 0.9 percent in March, the largest decrease since falling 1.4 percent in October 2023.
- Over three-fourths of the March decline is attributable to a 4.0-percent drop in the index for final demand energy.
- Prices for final demand foods decreased 2.1 percent.
- The final demand goods less foods and energy rose 0.3 percent.
- Two-thirds of the March decline in the index for final demand goods can be traced to an 11.1-percent drop in prices for gasoline.
- The indexes for chicken eggs, beef and veal, fresh and dry vegetables, diesel fuel, and jet fuel also moved lower.
- Prices for steel mill products increased 7.1 percent. The indexes for residential electric power and for processed young chickens also advanced.
PPI Final Demand Services
Final Demand Services Details
- Prices for final demand services fell 0.2 percent in March, the largest decline since moving down 0.2 percent in July 2024.
- Leading the March decrease, margins for final demand trade services dropped 0.7 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.)
- Prices for final demand transportation and warehousing services moved down 0.6 percent.
- In contrast, the index for final demand services less trade, transportation, and warehousing increased 0.1 percent.
- A 1.3-percent decrease in the index for machinery and vehicle wholesaling was a major factor in the March decline in prices for final demand services.
- The indexes for airline passenger services; food retailing; apparel, jewelry, footwear, and accessories retailing; automobiles retailing (partial); and guestroom rental also moved lower.
- Prices for legal services rose 1.5 percent. The indexes for chemicals and allied products wholesaling and for long-distance motor carrying also advanced.
Producer Prices Year-Over-Year
PPI Year-Over-Year Details
- The Producer Price Index for final demand was up 2.7 percent.
- Final demand goods rose 0.9 percent
- Final demand services rose 3.6 percent
Falling Prices Hooray?
Yes, and no but mostly no.
The plunge in the price of gasoline and energy is a sign of a slowing economy. Consumers will like the drop in the price at the pump but the repercussions are ominous.
The decline in the price of food is always welcome but last month and this month mostly balance out.
Impact of Tariffs
I bolded the key items: Prices for steel mill products increased 7.1 percent. The final demand goods less foods and energy rose 0.3 percent.
These are stagflationary items. Falling demand and rising prices.
This was not a good report.
Related Items
April 10, 2025: CPI Much Better than Expected, Bond Market Reacts Poorly in Big Warning
The CPI posted some stellar numbers, but the bond market yawns.
April 10, 2025: Trump Tariff Pause Ignites Another Mad Dash for Imports
Companies cancelled import orders from high-tariffed countries. Now they want those orders.
April 11, 2025: How Will Parts Hoarding and the Surge in Imports Impact GDP this Year?
A reader asked the above question. It’s a good one, answer below.
So we only look at “core” CPI when it is lower than headline?
Computers are a dynamic and growing industry because the cost of computer power plunges every year. Demand is insatiable. Deflation is good for business.
Trump Wants Tariffs to Bring Back U.S. Jobs. They Might Speed Up AI Automation Insteadhttps://time.com/7276087/trump-tariffs-ai-automation-robots/
Who here is being visited in their dreams by Orange Man Bad? Like Freddy Kruger. Lol. Orange Man Bad ate my lunch! Orange Man Bad stole my homework. Orange Man Bad touched me like I showed you on the doll!
Orange Man just got the Dollar Store to raise prices from$1.25 to $1.50.
Are we winning yet?
Just wait for the next sale at Albertsons, they roll over the same products every 3 – 4 weeks. Prob better on $ / quantity, too. Full disclosure: no Dollar Stores or Bezo’s Whole Foods in my neighborhood.
It should be called The Dollar and Fitty Cent store.
Nope….fake news….Made in Chiner junk and poison food still a buck 25 cent at my store
Must be serious, like you said last week. Set up live ticker for us to follow in real time.
Orange man bad might just cost you your job, at the least he’s going to impact your standard of living, negatively.
Agree 100% with analysis. As usual, the clueless cheering this on don’t know what’s happening out there. The 100%+ tariff war between US and China now will result in higher inflation, it’s only a question of when and the fallout.
The bond market is in total disarray, another bad warning sign.
Every day deeper into the Trump admin is another day closer to the Trumpocolypse™ and I believe I predicted a recession in Q3/Q4 of 2025 a while back. Looks like we’re right on schedule. Trump/GOP will own 100% of it and midterms are around the corner.
Except this was already debunked by Anna Wong at Bloomberg weeks ago if you were paying attention. Its disinflationary to the tune of 30bps based on employment and growth. That’s what the data shows. Sure there’s a trade off and I wouldn’t want to be here in a year but that’s a long time away. A lifetime for some
Mpox, you basically top ticked the bond market with your post. We were near 4.60 on the 10 year and now 4.50. You literally are retail.
Retail are the majority here.
WTF are you talking about? I have a bond portfolio of munis, corporates and treasuries. You are a one dimensional cartoon focused on the 10 year and I’m looking at a broad spectrum of bonds.
And you misspelled retail, its RICH.
Try to keep up.
https://archive.is/MbZlN
Demand is down because no one can afford anything
Turns out a 5k mortgage payment makes a dent in one’s disposable income.
What changes demand? The textbook version: (from investopedia.com
Income: How much consumers have to spend.Consumer preferences: What types of products are popular at any given moment.Buyer expectations: Does the consumer expect the price to rise in the future, perhaps due to limited supply?Price: How much does the good or service cost?Prices of related items: Are there any substitute goods or services of similar value that cost a lot less?Implied above: demand is down because people sense bad times are looming and tightening the belt.
Yeah, sure bud…they’re snapping up $2 to $4 million homes around me like there’s no tomorrow. Builders can’t keep up. Same homes were $1.2M before Bidenflation.
Think about the whole “Drill Baby Drill” mantra. So, now, domestic producers are getting 12 percent less for the product they produce (oil) and the steel (drill pipe) that they import and purchase is going up dramatically. One might say, “Oh, they should just purchase American steel (‘MURICA!!). Well, if the price of imported steel increases, domestic producers will certainly raise their prices (Yea! Steelworkers!).
Therefore, domestic production in oil and gas is about to start declining, and the economy in Texas is getting ready to shrink.
You mean central planning doesn’t work? Oh no, somebody pick up the phone and tell trump right away!
My brother is a rig boss, and he’s been told to take 3 months off. He’s not happy. I told him this is what your 2 trump votes earned you, even though you abstained in 2024.
I love the realization and anger on his face as he watches OAN try and spin it as positive. Play stupid games, win stupid prizes.
“I told you so,” is always helpful.
By the time it’s uttered, it’s too late obviously.
One must laugh at the clowns, however…
Elections have consequences,,,
But wait. Tariffs will affect oil imports, so the local producers may have a cost advantage. And maybe the steel mills will make extra profits and invest in new plant/equipment. It is all one big cluster fudge at this point, which might be a good thing, if you think about it.
Petroleum is is less than 10% of Texas state and local revenue. Petroleum jobs are less than 2% of total Texas employment.
last time Trump was POTUS oil was in. bear market. i don’t mean covid, it started in like 2017. easy money led to billions in loans going to shale producers who were drilling at a massive loss. got so bad most of the offshore drilling industry went bankrupt or were bough tout after losing 95% of their market caps(i know this because I unfortunately owned shares in a few). Even supermajors like XOM had to issue dent to pay dividends.
Except that normally gasoline prices take off BY March in the beginnings of a seasonal rally leading to the full-bore summer driving season. And after the late winter/early spring refinery conversions to the more oxygenated blends. (Recall way back when cities had a smog haze to them? Oxygenated gasoline helps improve that.)
Ergo, it really says something about the economy and financial systems that we are in fact seeing a major opposite – significant gas price declines. April may reverse this as the gas industry jacked prices 20-40 cents when Trumps tariffs started. (As if there was ANYTHING in them effecting gasoline. Not a darn thing.) They just took the opportunity to gouge consumers
There is so much TDS in this post that’s its hard to comprehend. Gas prices work off of wholesale prices. They are down a lot and continue to go down. Sure that could change but tariffs have nothing to do with what gasoline will do. I’m in the 2.60s for gas prices already. Down a lot from January.
“… but tariffs have nothing to do with what gasoline will do.”
When you post dumb things like this, you lose 100% credibility here then you whine and say people have TDS but don’t bother to look in the mirror when it’s obvious you can’t think clearly.
Whiolesale prices based on oil prices. If oil goes up it affects gasoline. It’s down 25% in a month. Can you do the math? No.
He’s a 100% credible toady.
The impact of all of this is at the margin. Demand is changing regardless of tariffs, just as supply is changing from other factors. I suspect what we are witnessing is mostly a speculation effect in an uncertain situation..
Gas will go even lower with a US recession and China getting economically hammered. It will go lower. The Dollar is correcting nicely from its ridiculously high level to boot.
We’re seeing gas price declines because of anticipated recession. And OPEC increased production no doubt as a way to bribe Trump — in addition to the Saudis hosting a golf tournament at Trumps resort.
Anyone rememebr how MAGA lost their heads at the stupidest theories about how Hunter/Joe profitting off foreign interests? Can anyone imagine if the Saudis paid Biden or Obama to host some Golf tournament while they were presidents? Or Amazon paid $45million for the show of a sitting First Lady. like Amazon just paid Melania?? Meme coins anyone? Corruption literally out in the open and MAGA claps.
Yes Hunter is squeaky clean. His art also sold well because of his immense talent.
who cares, Hunter Biden was never president, and other than being a extra-crackheady he’s no different than most kids of politicians. what do Trump’s kids do?As if their success isn’t tied to daddy???
point is Trumo is literally being bribed while he is president out in the open. Amazon gave his wife $40 million for a stupid show while her husband is president. the Saudis, who are evil MF’s are literally paying Trump’s enterprises to host a golf tournament. Can anyone imagine, just imagine what would have happened if while he was president Obama hosted Saudi tournaments for money at a property they owned? How about Trump issuing meme coins while he controls the agencies that supposed to police things like meme coins?
Given that Biden pardoned him,.I suspect the real Hunter story has not broken yet. Likely it will begin when the Hunter files are made public.
what do you mean? he pardoned him for a crime he was already convicte for. which was 100% political, as if a Republican prosecutor ever before prosecuted someone for owning a gun while addicted to something. Ever heard of Florida? find me a gun owner there that isn’t either a fall down drunk or meth head.
Everyone should be happy that lawyers are making more money!
Maybe people don’t like lawyers?
Fools when we have recession prices go down
Fools, have you heard of stagflation?
Just the start. Prices at the pump will be coming down bigly. Will filter through to everything. More good news Mish
Prices went up again.
What? You show me your chart and I will show you mine. On April 2 RBOB was 2.30 a gallon. Today its 1.97. This will filter to retail prices over a week to 10 days. I’m guessing you failed the cookie test as a kid also.
Geez, I wish I was in the US. Down here (Bahamas) diesel is running $5.50 +/- plus tax
Sure so by your logic we should encourage recessions and depressions, keep gas real low yipeee
Mooch! Still upset about that 11 day job.
Business cycles actually play an important role in economic health. It’s like flushing the toilet.
I’ll buy when oil is near $40. Still a ways to go.