FX.co ★ US Producer Prices Post Surprise 0.4% Drop

In March 2025, U.S. factory gate prices experienced an unexpected decline of 0.4% from the previous month. This marks the first dip in the Producer Price Index (PPI) since October 2023, following a modest increase of 0.1% in February, and defying predictions of a 0.3% rise. Notably, goods prices fell by 0.9%, the most significant decrease since October 2023, driven largely by an 11% drop in gasoline prices. Additionally, prices for chicken eggs, beef and veal, fresh and dry vegetables, diesel fuel, and jet fuel saw reductions. Service costs also fell by 0.2%, registering the largest decline since July 2024, with a notable 1.3% decrease in machinery and vehicle wholesaling. Other areas witnessing reductions included airline passenger services; food retailing; apparel, jewelry, footwear, and accessory retailing; certain segments of automobile retailing; and guestroom rentals. In contrast, core producer prices only saw a slight increase of 0.1%, falling short of the anticipated 0.3% rise. On an annual basis, producer prices rose by 2.7%, the smallest advance in half a year, compared to expectations of a 3.3% increase. The annual core rate also eased to 3.3% from a previous 3.5%.