Wholesale inflation rose 2.1% in March — sharpest increase in 11 months

Wholesale prices last month saw their sharpest year-on-year increase in 11 months — one day after a hotter-than-expected US inflation report sent stocks tumbling and stoked fears that the Fed won’t cut interest rates anytime soon.

The Producer Price Index — the metric that tracks the prices of products sold as they leave manufacturers — rose 2.1% in March versus a year earlier — its steepest gain since April 2023, according to the US Labor Department.

On the positive side, the PPI’s increase — driven by rising prices for services including airfares and securities brokerage — came in slightly below economist’s forecasts for a 2.2% gain, according to Bloomberg. On a month-to-month basis, the PPI rose 0.2 after a sharp advance in February, slightly below the 0.3 increase that economists had expected.

The lower-than-expected numbers came as a modest relief on Thursday morning before the bell. Dow futures were around even after earlier trading down as much as 150 points while S&P 500 futures were also trading flat.

On Wednesday, the Bureau of Labor Statistics reported that the Consumer Price Index — which tracks changes in the costs of everyday goods and services — rose 3.5%, well above the Fed’s 2% target and the third straight month that the closely watched metric came in higher than expected.

The Dow dropped 422 points on Wednesday as hopes for a start to rate cuts for the Federal Reserve were pushed back to September from June, with the consensus forecast getting trimmed to two, quarter-point reductions instead of three.