U.S. producer prices increased more than expected in March amid a surge in demand for services, suggesting inflation could remain high for a while.
According to Labor Department data, the producer price index for final demand increased 1.4% compared to rising 0.9% in February. On a year-on-year basis, PPI jumped 11.2%, the largest increase since 12-month data were first calculated in November 2010, after advancing 10.3% in February.
Reuters polled forecasted the PPI to rise 1.1% month-on-month and 10.6% year-on-year.
Core PPI excluding volatile food, energy and trade services components, producer prices accelerated 0.9% in March. On a year-on-year basis, the core PPI soared 7.0% after rising 6.7% in February.
Earlier the U.S. CPI came in as the most in 16 and half years in March mostly driven by prices of gasoline.