WASHINGTON (AP) â¿¿ A measure of wholesale prices likely fell in March, reflecting a big drop in energy prices. Economists are looking for the Labor Department's producer price index to drop 0.2 percent in March compared to February, according to a survey by FactSet. The core index, which excludes volatile food and energy prices, is expected to have risen just 0.2 percent in March. The report will be released at 8:30 a.m. EDT Friday. Wholesale and retail inflation has remained mild, apart from sharp swings in gas prices. In February, wholesale prices jumped 0.7 percent, led by a 7.2 percent surge in wholesale gas prices. Even with the increase in February, wholesale prices have risen just 1.7 percent in the past 12 months ending in February. That's below the Federal Reserve's 2 percent target for consumer inflation. Mild inflation gives the Fed more latitude to continue with its aggressive policies to spur more economic growth by keeping interest rates at record low levels. Gas prices spiked earlier this year. The national price for a gallon of gasoline jumped from $3.42 on Jan. 31 to $3.78 on Feb. 28. But since that time, prices have retreated. A gallon of regular gas averaged $3.56 on Thursday. Low inflation and falling gas prices means consumers can spend more on other goods. As long as the inflation rate stays mild, the Fed has said it plans to keep the short-term interest rate it controls at a record low near zero until the unemployment rate falls below 6.5 percent. Unemployment in March dropped to a four-year low of 7.6 percent but the number of jobs created slowed to just 88,000, the smallest in nine months. A rise in wholesale prices does not always mean consumers will soon pay more. High unemployment and weak pay gains have made it difficult for retailers to pass on higher costs to consumers.
The government's consumer price index rose 0.7 percent in February, the biggest one-month jump in more than three years. But three-fourths of that increased reflected a surge in gas prices. Outside of energy, inflation was mostly modest.For the 12 months ending in February, consumer prices increased a modest 2 percent.