Prices at the wholesale level rose in March for the first time since October, according to the U.S. Labor Department on Tuesday.
The Producer Price Index increased 0.2% from February, following declines of 0.5% and 0.8% the previous two months. Excluding volatile food and energy prices, the increase was also 0.2%, indicating broad-based gains.
Despite the hike, the PPI is still down 0.8% from a year ago -- but is up 0.9% when the food and energy sectors are excluded.
Meantime, a separate report from the Commerce Department shows retail sales in March increased 0.9% from February. This is the first gain in four months and the biggest increase in a year, but was slightly less than many analysts were expecting. Compared to a year earlier, the March level is 1.4% higher.
The department also upwardly revised February’s level to a 0.5% drop from an originally reported 0.6% decline.
“After months of restrained spending, consumers returned to the marketplace in March,” said Lindsey Piegza, chief economist at the investment firm Sterne Agee. “While hardly enough to offset the weakness since December, the smaller-than-expected rise at the end of the first quarter is a welcome step in the right direction.”
She cautioned that going forward into the second quarter, however, with much of the same themes lingering, such as overall activity, as well as hiring and certainly income growth, conditions are likely to remain restrained, continuing to limit spending patterns.
“From the Federal Reserve’s point of view, with consumer spending still fragile, a declining momentum in hiring, and virtually nonexistent inflation, there remains no rush to adjust monetary policy,” Piegza said.
Federal Reserve officials late last year indicated they were possibly open to increasing interest rates from near 0% around mid-2015. However, more recently they have indicated they are willing to hold off on such a move due to concerns about the economy’s performance.