The Producer Price Index (PPI), which measures inflation on the wholesale level, decreased by 0.5% in March, coming in well below expectations of no change. On an annual basis, PPI saw a sharp decline from 4.9% to 2.7%. Core PPI, which also strips out volatile food and energy prices, fell by 0.1% with the year-over-year reading dropping from 4.4% to 3.4%.

What’s the bottom line? Annual wholesale inflation readings have made significant improvement as they continue to move lower in the right direction. At its peak last March, PPI was at 11.7% year-over-year and it is now at 2.7% - a decline of 9%! PPI is now at its lowest level since February 2021.