U.S. PPI (Mar) Actual -1.2%, Expected 0.0%, Previous 0.1%
U.S. Core PPI (Mar) Actual 0.0%, Expected 0.1%, Previous 0.2%
Release Explanation: The rate of inflation of manufacturers when purchasing Goods and Services; the rate of Inflation at the factory Gate.
Economic impact: An increase in the price of raw Goods and services usually gets passed on to the consumer; therefore this is the first stage on Retail Inflation. “This can go on to affect CPI, Retail Sales and Consumer Confidence. This is an inflationary report and therefore is a pre-cursor to CPI data,” TheLFB-Forex.com Trade Team said.
TheLFB-Forex.com Trade Desk Thoughts: Producer prices fell by 1.2% in March, the Department of Labor said today. That was considerably more than the 0.0% read economists had expected to see and below the 0.1% increase seen in February.
Core prices, ex-food and energy, remained stable last month after the 0.2% increase seen in February.
At the earlier stage of processing, prices received by manufacturers for intermediate goods decreased 1.5% for the eighth consecutive month in March. The index for crude materials declined 0.3% following a 4.5% decrease in February.
The numbers imply that demand is still weakening, TheLFB-Forex.com Trade Team said. It's a cycle of declining jobs and tightening credit that's difficult to break, they added. For the year, prices decreased 3.4% in March.
Forex Technical Reaction: The euro fell 30 pips during the news release, totaling 140 pips lost for the day. U.S. futures also had a negative reaction, as the S&P shed almost 9 points during the news release.