US producer prices recorded their largest increase in nine months last month, but that jump will probably not ignite inflation pressures as the nation’s economic growth remains moderate.
The US Department of Labor said on Friday that its seasonally adjusted producer price index (PPI) for final demand increased 0.5 percent last month, after slipping 0.1 percent in February. The increase last month, which was the largest since June last year, reflected a surge in the prices of food and trade services.
“Will inflation accelerate? Probably, but not rapidly,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. “Growing demand should stabilize prices, but the economy is not strong enough to cause inflation to pick up very much.”
Economists had expected prices received by the nation’s farms, factories and refineries to gain only 0.1 percent last month. Some were puzzled by the increase.
Gus Faucher, a senior economist at PNC Financial Services in Pittsburgh, said harsh weather during the winter could have distorted producer prices.
“But there is also the possibility that inflation may be picking up, as firms raise prices given the recent limited acceleration in wage growth and stronger demand,” Faucher said.
A survey on Tuesday last week showed a significant increase in the share of small businesses raising their prices this month. Fewer reduced prices last month. US government data on Thursday showed an unexpectedly big rise in the price of imported goods last month.
Last month, prices at the factory gate excluding volatile food and energy costs rose 0.6 percent, the biggest gain in three years. The so-called core PPI for final demand had declined 0.2 percent in February.
A broader gauge of core producer prices — final demand less foods, energy, and trade services — rose 0.3 percent after ticking up 0.1 percent.
US demand could strengthen further with a separate report on Friday showing US consumer sentiment hitting a nine-month high early this month.
The consumer sentiment index from Thomson Reuters/University of Michigan rose to 82.6 this month, the highest since July, from 80 in March.
The upbeat household sentiment fit in with other reports such as employment and automobile sales that have suggested the economy was regaining some momentum after a weather-induced lull early this year.
Last month, food prices jumped 1.1 percent, the largest increase since May last year, after rising 0.6 percent in February.
Food prices were pushed up by a surge in the cost of pork, which saw its largest rise since August 2008. Sausage, deli meat and boxed meat prices rose by the most since August 1980.
Services for final demand spiked 0.7 percent, the largest gain since January 2010, after falling 0.3 percent in February.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
Taiwan’s food delivery market could undergo a major shift if Singapore-based Grab Holdings Ltd completes its planned acquisition of Delivery Hero SE’s Foodpanda business in Taiwan, industry experts said. Grab on Monday last week announced it would acquire Foodpanda’s Taiwan operations for US$600 million. The deal is expected to be finalized in the second half of this year, with Grab aiming to complete user migration to its platform by the first half of next year. A duopoly between Uber Eats and Foodpanda dominates Taiwan’s delivery market, a structure that has remained intact since the Fair Trade Commission (FTC) blocked Uber Technologies Inc’s
RSS