Inflation tumbled to a 2.7% annual rate in March, according to the Bureau of Labor Statistics’ Producer Price Index, The Washington Examiner reports.
What’s going on: “On a month-to-month basis, the wholesale price index declined by 0.5%, the Bureau of [Labor Statistics] reported Thursday morning—more encouraging inflation news. The decrease is an indication that inflationary pressures are abating in the face of the Federal Reserve’s campaign to slow economywide spending by hiking interest rates.”
- However, inflation is still far higher than the central bank’s target of 2% and is hurting consumers’ purchasing power.
The details: The Producer Price Index for final demand goods edged down a seasonally adjusted 0.5% in March, after declining 0.1% in February.
- Excluding food, energy and trade services, prices for final demand goods increased 0.1% in March, following a 0.2% increase in February.
- In the past 12 months, the index for final demand goods—excluding food, energy and trade services—has risen 3.6%.
The backdrop: The Fed has been increasing interest rates for more than a year, with staffers expecting a “mild” imminent recession.