Wholesale Prices Jump in Worrisome Sign for Inflation

What Wednesday’s Economic Reports Tell Us

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Wholesale prices increased at a record pace in March, and mortgage applications picked up slightly last week, reports showed Wednesday.

Here’s a quick look at the most significant economic indicators of the day and what they tell us.

Producer Price Index

  • Wholesale prices rose at a record-setting pace in March in a worrisome sign for future inflation on store shelves. 
  • An index measuring the prices companies receive for the goods they make rose 1.4% between March and February, the biggest one-month increase in data going back to 2009, according to the Bureau of Labor Statistics. Prices are now 11.2% higher than last March, the most for a 12-month period since that metric was first calculated in 2010. Those price increases are likely to be passed on to consumers, economists said. 
  • While Tuesday’s report on consumer prices suggested those may have peaked or could soon, Wednesday’s data is a sobering reminder that there are still many headwinds, economists said. The Russian invasion of Ukraine—which has driven up the price of oil and other resources—and persistent disruptions to the supply chain in the U.S. and abroad are likely to keep inflation elevated, they said. 

Mortgage Applications

  • There was a slight increase in the volume of mortgage applications from homebuyers last week (1.4% more) despite the average rate for a 30-year mortgage jumping to 5.13% and clearing the 5% level for the first time since 2018, according to data from the Mortgage Bankers Association. This may be because people are racing to buy before rates get any worse. 
  • This year’s dramatic pop in mortgage rates has crushed interest in refinancing (the volume of refinancing applications fell for the fifth week in a row and is down 62% over the last 12 months), but it hasn’t slowed applications for purchases as much.

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  1. Bureau of Labor Statistics. “Producer Price Index News Release summary - 2022 M03 Results.”

  2.  Mortgage Bankers Association. “Mortgage Applications Decrease in Latest MBA Weekly Survey; Higher Mortgage Rates to Slow Purchase Originations Growth and Refinances.”

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