Fed:Producer prices rising at fastest pace in over a year

AAP General News (Australia)
04-27-2010
Fed:Producer prices rising at fastest pace in over a year

CANBERRA, April 27 AAP - Business costs for materials increased at their fastest pace
in over a year in the first three months of 2010, raising the risk of higher consumer
prices in coming months.

The producer price index (PPI) at the final stage of production rose 1.0 per cent in
the March quarter, Australian Bureau of Statistics data released on Tuesday showed.

This left the annual rate showing a 0.1 per cent decline in the year to end-March,
reflecting the weakness of previous quarters.

Economists' forecasts had centred on a 0.6 per cent for the March quarter with the
annual rate falling by 0.7 per cent.

The March quarter consumer price index (CPI) is released on Wednesday

While economists say there is no direct correlation between the PPI and CPI, the recovery
in prices across all stages of production could put upward pressure on consumer prices
in coming quarters should business pass on their increased costs.

AAP cb/sb/maur/

KEYWORD: ECONOMY

2010 AAP Information Services Pty Limited (AAP) or its Licensors.