10.04.201821:32:00UTC+00U.S. Producer Price Index Gains 0.3% in March

U.S. producer prices increased in March, boosted by rising healthcare and food costs, pointing to a steady buildup of inflation pressures.

According to the Labor Department, its producer price index for final demand increased 0.3 percent in March after rising 0.2 percent in February.

A key gauge of underlying producer price pressures that excludes food, energy and trade services rose 0.4 percent in March, increasing by the same margin for a third consecutive month. The so-called core PPI increased 2.9 percent in the 12 months through March, the largest growth since August 2014, after rising 2.7 percent in February.

The broad-based increase in wholesale prices supports views that inflation will accelerate this year.

Producer prices have risen solidly since January, largely propelled by the services components. Economists expect these increases to spill over into the consumer price index (CPI) and the Fed's preferred inflation measure, the personal consumption expenditures (PCE) price index.

The PCE price index excluding food and energy, increased 1.6 percent in February after remaining at 1.5 percent for four consecutive months.

Prices for goods rose 0.3 percent, after slipping 0.1 percent in February. Wholesale food prices jumped 2.2 percent after three straight monthly declines. Gasoline prices fell 3.7 percent after dropping 1.6 percent in February.

Most economists believe that strengthening inflation will prompt the Federal Reserve to hike interest rates three more times this year. The U.S. central bank increased borrowing costs last month and forecast at least two more rate hikes in 2018.

U.S. Treasury prices dropped on the inflation data while the dollar pared losses to trade slightly lower against a basket of currencies.