Feds: food inflation drives up March wholesale index

Nation's Restaurant News,  April 28, 2008  

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WASHINGTON -- Record spikes in food and energy drove overall domestic wholesale prices for March to their second-largest onemonth increase in 33 years, according to the Labor Department's monthly Producer Price Index.

After declining 0.5 percent in February, wholesale food prices rose 1.2 percent in March as vegetables jumped 15.4 percent, milled rice climbed 8.7 percent, and beef and veal increased 4 percent. Wholesale energy prices grew 2.9 percent in March after rising 0.8 percent in February.

Overall U.S. producer prices jumped 1.1 percent last month, after rising 0.3 percent in February on a seasonally adjusted basis, the department said. Excluding food and energy, the core index rose 0.2 percent in March, versus 0.5 percent in February and 0.4 percent in January. For the 12 months ended in March, wholesale prices advanced 6.9 percent on an unadjusted basis.

Year-to-year retail food inflation also outpaced the overall rate for March as the government's monthly Consumer Price Index rose 0.9 percent from its February level before seasonal adjustment, and was up 4 percent from March 2007, the Labor Department reported.

Prices consumers paid for food and beverage items rose 4.4 percent in March compared with year-before levels, including a 4.7-percent rise for food at home and a 4.1-percent jump for food away from home.

By comparison, consumers' expenditures on housing rose 3 percent last month, versus year-earlier results, as fuels and utilities climbed 6.5 percent and gasoline was up 26 percent. On a seasonally adjusted basis, all consumer items gauged by the CPI rose this year from February to March by 0.3 percent as food increased 0.2 percent, including a 0.3-percent increase in food away from home.

March's sharp jump in wholesale food prices could be expected to prompt accelerated pass-throughs that would appear as higher consumer prices in future government reports. However, some analysts were seeing signs of moderating food inflation at the consumer level because retail inflation figures for March showed lower rates for such things as dairy goods, alcoholic beverages and breakfast cereals, compared with monthly spikes a year earlier.

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