{"id":429507,"date":"2026-04-14T19:40:15","date_gmt":"2026-04-14T12:40:15","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/2026\/04\/us-march-ppi-final-demand-4-0-y-y-vs-4-7-expected\/"},"modified":"2026-04-14T19:40:15","modified_gmt":"2026-04-14T12:40:15","slug":"us-march-ppi-final-demand-4-0-y-y-vs-4-7-expected","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/us-march-ppi-final-demand-4-0-y-y-vs-4-7-expected-429507\/","title":{"rendered":"US March PPI final demand 4.0% y\/y vs +4.7% expected"},"content":{"rendered":"<div>\n<ul>\n<li>Prior was 3.4% y\/y<\/li>\n<li>PPI M\/M +0.5% vs +1.1% expected<\/li>\n<li>Prior +0.7% (revised to +0.5%)<\/li>\n<\/ul>\n<p>Core PPI<\/p>\n<ul>\n<li>Core PPI Y\/Y +3.8% vs +4.2% expected<\/li>\n<li>Prior +3.9% (revised to 3.8%)<\/li>\n<li>Core PPI M\/M +0.1% vs +0.5% expected<\/li>\n<li>Prior Core PPI MoM +0.5%(revised to +0.3%)<\/li>\n<li>PPI Ex Foor\/Energy\/Trade YoY 3.6% vs 3.5% last month<\/li>\n<li>PPI Ex Food\/Energy\/Trader MoM +0.2% vs +0.5% last month <\/li>\n<\/ul>\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">The March PPI came in well below consensus on both measures \u2014 4.0% year-over-year versus the expected 4.7%, and 0.5% month-over-month versus the expected 1.1%. Given that the forecast was built around an anticipated energy surge, the interesting question is where the miss came from, because energy actually did spike dramatically.<\/p>\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">Energy delivered, but not as much as priced in. Final demand energy rose 8.5% month-over-month, driven by gasoline (+15.7%), diesel (+42.0%), jet fuel (+30.7%), and home heating oil (+39.4%). These are big numbers, but if the consensus was modeling an even larger pass-through from crude, the miss partly reflects crude oil&#8217;s 12-month gain of 12.3% being more moderate than refined product moves \u2014 and natural gas actually collapsed 51.7% on the month at the unprocessed level, which was a massive drag on the intermediate demand side. So the energy story was a tale of two markets: refined products surged, but natural gas cratered, partially offsetting the headline impact.<\/p>\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">Services were the real surprise \u2014 completely flat. Final demand services came in at 0.0% month-over-month, down from +0.3% in February. Services carry about 68% of the final demand weight, so this was the single biggest source of the miss. A few dynamics drove it. Trade margins declined 0.3%, with food and alcohol wholesaling margins dropping 6.0% and fuels and lubricants retailing falling 10.2%. The retailing margins decline is notable because it suggests retailers absorbed some of the energy cost increase rather than passing it through \u2014 exactly the opposite of what a simple cost-push model would predict. Meanwhile, the &#8220;other services&#8221; category (services less trade, transportation, and warehousing) rose just 0.1%, with categories like securities brokerage, deposit services, and residential property brokerage commissions all falling.<\/p>\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">Transportation rose but not enough to compensate. Transportation and warehousing services gained 1.3%, boosted by airline passenger fares (+2.8%) and truck freight (+1.0%), but at only about 5% of the final demand weight, this couldn&#8217;t offset the drag from trade margins and flat core services.<\/p>\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">Food prices actually declined. Final demand foods fell 0.3%, with fresh and dry vegetables dropping 10.7% and crude consumer foods plunging 10.0%. This worked against the headline number as well.<\/p>\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">The core measure tells the real story. Final demand excluding foods, energy, and trade services \u2014 the &#8220;core&#8221; PPI \u2014 rose just 0.2%, way down from 0.5% in both January and February. This suggests that underlying producer-level inflation momentum actually decelerated in March, which the headline consensus apparently didn&#8217;t account for, being too focused on the energy component.<\/p>\n<p class=\"font-claude-response-body break-words whitespace-normal leading-[1.7]\">In short, the consensus appears to have overweighted the crude oil spike and underestimated three offsetting forces: the natural gas collapse, the compression of trade margins (retailers and wholesalers eating costs), and a broader deceleration in core services inflation. The energy pass-through was real but narrower than expected, and the rest of the economy&#8217;s pricing power actually softened.<\/p>\n<p>                            This article was written by Adam Button at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Prior was 3.4% y\/y PPI M\/M +0.5% vs +1.1% expected Prior +0.7% (revised to +0.5%) Core PPI Core PPI Y\/Y +3.8% vs +4.2% expected Prior +3.9% (revised to 3.8%) Core PPI M\/M&hellip;<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-429507","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/429507","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=429507"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/429507\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=429507"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=429507"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=429507"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}