Producer prices surge 11.2 per cent in March on higher energy costs

The surging cost of energy pushed wholesale prices up a record 11.2 per cent last month from a year earlier — another sign that inflationary pressure is widespread in the US economy.

The Labor Department on Wednesday said its producer price index — which measures inflation before it reaches consumers — climbed at the fastest year-over-year pace in records going back to 2010 and rose 1.4 per cent from February.

Energy prices, which soared after Russia's February 24 invasion of Ukraine, were up 36.7 per cent from March 2021.

The wholesale inflation report came out a day after the Labour Department reported that consumer prices last month jumped 8.5 per cent from a year earlier — fastest annual clip since December 1981.

Under pressure to combat rising prices, the Federal Reserve raised to benchmark short-term rate by a quarter-point last month and has signalled that it plans several more hikes this year.

An unexpectedly quick economic recovery from the pandemic recession of 2020 caught businesses by surprise.

Their scramble to meet surging customer demand overwhelmed factories, ports and freight yards. The Ukraine war and draconian COVID-19 lockdowns in China have further disrupted supply chains over the past month.

“With a new wave of lockdowns in China and the war in Ukraine raging on ... risks to the inflation outlook remain firmly to the upside,'' economists Mahir Rasheed and Kathy Bostjancic of Oxford Economics wrote in a research report.