So, Wall Street was all geared up for the so-called "Hormuz shock" to send wholesale prices soaring in March. The data, however, had other plans.
According to the Bureau of Labor Statistics, the Producer Price Index for final demand increased by 0.5% from February to March. That matched the previous month's pace but landed way below the 1.1% increase economists were expecting.
Looking at the yearly picture, PPI came in at 4.0%—again, below the 4.6% consensus. It's worth noting, though, that's up from 3.4% in February and represents the highest annual rate since February 2023.
The story was similar when you strip out the volatile food and energy categories. Core PPI rose a mere 0.1% on the month, missing the 0.5% forecast. Year-over-year, it decelerated to 3.8%, compared to expectations of 4.1%.
Here's a quick look at how the numbers stacked up:
| Metric | Actual | Consensus | Previous |
|---|---|---|---|
| PPI MoM | 0.5% | 1.1% | 0.5% |
| PPI YoY | 4.0% | 4.6% | 3.4% |
| Core PPI MoM | 0.1% | 0.5% | 0.3% (revised from 0.5%) |
| Core PPI YoY | 3.8% | 4.1% | 3.9% |
So, the big takeaway? For now, the feared inflationary spike from geopolitical tensions hasn't shown up in the producer price data. The market was braced for a shock, but got more of a gentle nudge instead.
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