Producer Prices in March – Energy Up, Services Down

The Bureau of Labor Statistics (BLS) released the Producer Price Indexes (PPI) for March. Inflation in prices received by producers (prior to sales to consumers) declined 0.1% in March based on declining prices in the service sector. In contrast, prices for goods rose 0.2% driven largely by a 1.8% increase in energy goods. The price index for goods less food and energy rose 0.1%.

Softwood lumber prices rose 2.8% in March but have largely hovered in the current range over the last six months. A strengthening of the Canadian dollar relative to the US dollar in the early months of 2016 may be stemming the flow of Canadian lumber to the US putting upward pressure on prices. OSB prices declined for the fourth straight month in March. OSB prices have given back roughly a third of the 25% increase since mid-2015. Gypsum prices moved sideways in February and March but are in the range sustained through 2014 and 2015.

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