WASHINGTON — U.S. wholesale costs fell in March, a indication that inflationary pressures in the economy are alleviating more than a year after the Federal Reserve started strongly raising interest rates.
Plunging energy costs pulled the federalgovernment’s manufacturer cost index down 0.5% from February to March; it hadactually been thesame from January to February. Compared with a year ago, wholesale costs were up 2.7% in March — the mildest 12-month boost consideringthat January 2021 and down substantially from a 4.7% yearly increase in February.
The Labor Department’s manufacturer cost index shows costs charged by producers, farmers and wholesalers. It can offer an early indication of how quick customer inflation will increase.
A big drop in wholesale gas accounted for much of the sharp downturn in manufacturer costs. But even leavingout unpredictable food and energy rates, so-called core wholesale inflation fell 0.1% in March, the veryfirst such drop in almost 3 years. The Fed and lotsof personal financialexperts regard core rates as a muchbetter gauge of underlying inflation. Core wholesale inflation was up simply 3.4% from March 2022, the mostaffordable year-over-year increase giventhat 2021.
Behind last month’s drop in core rates was a sharp decrease in wholesale expenses for warehousing and transport. Overall services costs fell 0.3%, the veryfirst such drop because November2020
Household homeappliance costs fell 1.4%, automobile rates 0.3%. But wholesale food rates increased 0.6%, consistingof a 34% dive in egg costs.
Wholesale