March PPI Rose Less than Expected as Inflation Remains in Check

The Producer Price Index tracks the change in the selling price of goods and services sold by manufacturers. It is a leading indicator of consumer price inflation, because producers tend to relay higher costs to consumers through higher prices. With the economic volatility associated with rising price levels, the Fed often will raise interest rates to check inflation, given a high growth economic environment. On the other hand, low or falling PPI is indicative of declining prices, and may suggest an economic slowdown. Below is a list of today's headline reading compared to analyst estimates:

• Producer Price Index MoM 0.4% vs 0.5% Est
• PPI Ex Food & Energy MoM 0.2% vs 0.2% Est
• Producer Price Index YoY 3.3% vs 3.3% Est
• PPI Ex Food & Energy YoY 3.0% vs 2.9% Est

According to the Bureau of Labor Statistics, the Producer Price Index for finished goods advanced 0.4 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Finished goods prices rose 0.1 percent in January and decreased 0.1 percent in December. At the earlier stages of processing, the index for intermediate goods moved up 0.7 percent and crude goods prices increased 0.4 percent. On an unadjusted basis, the finished goods index rose 3.3 percent for the 12 months ended February 2012, the smallest year-over-year rise since a similar 3.3-percent advance in August 2010. US equity futures saw an initial move higher after the 8:30 a.m. ET release. Currently, Dow Jones Industrial Index Futures are trading about 17 points higher in pre-market trading.