US PPI Seen Rebounding in May

US producer prices increased by 0.5% month-over-month in March 2026, matching the previous period’s growth and falling short of market expectations of 1.1%. Goods prices surged 1.6%, the largest increase since August 2023, fueled by an 8.5% jump in energy costs, largely attributed to the ongoing Iran conflict. Meanwhile, final demand food prices declined by 0.3%. On the services side, prices remained unchanged after a 0.3% increase in February. Within this category, a 1.3% rise in transportation and warehousing costs, along with a 0.1% uptick in other final demand services, offset a 0.3% decline in trade service margins. Year-over-year, producer prices rose 4%, the largest increase since February 2023 but still below the expected 4.6%. The core index, excluding food, energy, and trade services, edged up 0.2% month-over-month, slower than the 0.5% gains seen in both January and February, and climbed 3.6% year-over-year.

US producer prices are expected to rise by 1.1% month-on-month in March 2026, marking the largest increase since March 2022, driven primarily by a surge in energy prices due to the conflict with Iran. This compares with a 0.7% gain in February. Core PPI, which excludes food and energy, is forecast to increase by 0.5%, unchanged from the previous month, suggesting that the oil-driven price spike has not yet broadly filtered through the economy. On an annual basis, headline producer inflation is projected to accelerate to 4.6%, the highest level since February 2023, up from 3.4% in February. Meanwhile, the annual core rate is expected to edge up for a fourth consecutive month to 4.1%, also marking its highest level since February 2023.

US producer prices rose 0.7% month-over-month in February 2026, above 0.5% in January and much higher than forecasts of 0.3%. It is the biggest increase in producer prices in seven months, with goods prices soaring 1.1% the most since August 2023, led by a 48.9% jump in prices for fresh and dry vegetables. The indexes for diesel fuel, chicken eggs, gasoline, jet fuel, and tobacco products also increased. Conversely, prices for jewelry and jewelry products fell 4%. Decreases were also seen in the cost for home heating oil and for soft drinks. Meanwhile, prices for services rose 0.5%, the least in three months, with prices for traveler accommodation services rising 5.7% and making the largest contribution. The core PPI increased 0.5%, after a 0.8% rise in January but above forecasts of 0.3%. On an annual basis, headline producer inflation jumped to 3.4%, the highest in a year, compared to 2.9% in January and forecasts it would remain at 2.9%. Core producer inflation also jumped to 3.9%.