(The Center Square) – The latest economic data shows that producer prices saw their most significant drop since the pandemic began.
The U.S. Bureau of Labor Statistics released its Producer Price Index data Thursday, which showed the index for final demand decreased 0.5% in March, though it has increased 2.7% over the last year.
“A 7.3-percent drop in margins for machinery and vehicle wholesaling was a major factor in the March decrease in prices for final demand services,” BLS said. “The indexes for truck transportation of freight, portfolio management, fuels and lubricants retailing, loan services (partial), and automobiles and automobile parts retailing also moved down. Conversely, prices for guestroom rental rose 4.6 percent. The indexes for food retailing and for transportation of passengers (partial) also advanced.”
BLS also released consumer pricing data earlier this week, which showed consumer prices rose 0.1% in March, contributing to a 5% hike over the last 12 months, roughly double what most economists say is a healthy inflation rate.
President Joe Biden has touted the fact that inflation is rising much less slowly than earlier in his administration. Republicans have blasted Biden for the higher prices and their impact on Americans and small businesses.
“Small businesses can’t catch a break in Biden’s economy,” said House Ways and Means Committee Chairman Jason Smith, R-Mo. “Skyrocketing prices of supplies, materials, and goods from Democrats’ reckless Washington spending and inflation crisis have left businesses struggling to keep their doors open. Rising interest rates have compounded problems for small businesses who now need to borrow to make payroll while they permanently shelve plans to expand or grow.”
The National Federation of Independent Businesses released survey results earlier this week reporting that their small business optimism index decreased in March, part of a trend of lower optimism that has continued for over a year.
“Small business owners are cynical about future economic conditions,” NFIB Chief Economist Bill Dunkelberg said. “Hiring plans fell to their lowest level since May 2020, but strong consumer spending has kept Main Street alive and supported strong labor demand.”