(CN) — The nation’s producer price index, the measure of inflation before it manifests itself in the consumer marketplace, fell in March, largely due to plummeting energy prices.
The Labor Department said Thursday that its producer price index fell 0.1 percent in March — the first drop since August.
Government economists attributed the change to a significant drop in energy prices, which fell 2.9 percent overall, led by an 8.3 percent drop in gasoline.
But that downward pressure has already reversed itself. In recent days oil prices have risen — making up nearly all of March loses — on word that Saudi Arabia wants to extend production cuts enacted by OPEC in January for another six months.
In January, the 13-member Organization of the Petroleum Exporting Countries committed to cut about 1.2 million barrels of oil a day in a bid to bring a vast global oversupply of crude back in line with demand and raise petroleum prices. The agreement helped raise oil prices about 20 percent after it was announced.
Russia and 10 other non-OPEC producers later joined the effort, pledging to trim production by another 558,000 barrels a day.
Saudi Arabia has told its OPEC partners it wants to renew the agreement at the organization’s next meeting, scheduled to be held in Vienna on May 25.
Overall domestic price pressures are rising, with most consumer inflation measures now above the Federal Reserve’s 2 percent target.
Wholesale prices rose 0.3 percent in February and 0.6 percent in January.
Producer prices were up 2.3 percent in March from a year earlier, the sharpest annual increase in five years.
Economists said the increases are a reflection of the strength of the U.S. dollar and increasing domestic demand for a wide range of goods.
Excluding food and energy, the producer price index was unchanged in March from the prior month and was up 1.6 percent from March 2016.