WASHINGTON – A big surge in energy costs pushed producer prices (search) up a steep 0.7 percent last month but underlying price pressures were subdued, a government report showed on Tuesday.
The Labor Department (search) said the jump in its producer price index (search), a measure of prices received by farms, factories and refineries, was the biggest since a matching energy-led gain in November.
But outside of volatile food and energy costs, producer prices advanced a mild 0.1 percent for the second straight month, which could help allay inflation concerns stoked by lofty oil prices.
While the increase in overall producer prices was slightly higher than the 0.6 percent expected on Wall Street, the rise in so-called core prices came in a tick below expectations.
Energy prices shot up 3.3 percent in March, the biggest jump since October, with gasoline prices up 5.3 percent, home heating oil up 15.7 percent and residential natural gas up 2.3 percent. Food prices advance 0.3 percent.
Over the past 12 months, producer prices have risen a sharp 4.9 percent — the biggest year-on-year gain since November — as oil prices have pushed higher.
Oil prices hit a record high above $58 a barrel early this month, but quickly retreated. Some analysts expect some energy price relief when the April producer price report is released.
Prices for cars, light trucks and SUVs slipped 0.2 percent last month, the second consecutive monthly drop, while the cost for computers plunged 3.4 percent.
The cost of business capital equipment contributed to the pickup in overall producer prices (search), rising 0.3 percent — a turnaround from a February drop.