WASHINGTON—The prices U.S. firms receive for their goods and services fell for the second straight month in March, a sign weakness in the global economy continues to keep the lid on inflation.
The producer-price index fell a seasonally adjusted 0.1% in March after dropping 0.2% in February, the Labor Department said Wednesday.
Core prices, considered a more-reliable inflation gauge because they strip out food and energy costs, also fell 0.1% in March after being flat in February.
Economists surveyed by The Wall Street Journal had predicted a 0.3% increase in overall prices and 0.2% growth in core prices in March.
Producer prices measure what firms charge to all customers-including consumers, the government and other businesses-before taxes. They typically highlight the path of consumer prices, the most closely followed gauge of inflation among economists.
Producer prices, like other inflation gauges, have been weak due largely to soft demand around the world and a sharp decline in the cost of oil since late 2014. In the 12 months through March, producer prices fell 0.1%.
Energy prices have slowly recovered in recent months but remain weak historically. Producer prices for energy goods climbed 1.8% in March, the biggest jump since last May, but were down nearly 14% from a year earlier, Wednesday’s report showed.
Food prices fell 0.9% from February and 2.5% from a year earlier.
Producer prices for all goods climbed 0.2% over the month, but were down 2.6% from a year earlier.
Service prices slipped 0.2% last month but were up 1.2% from 12 months earlier.
A proxy for consumer inflation—producer prices for personal consumption—rose 0.1% last month from February and were up by the same amount from 12 months earlier.
Weak inflation is weighing on Federal Reserve officials as they look for signs that the U.S. economy is strengthening and can withstand further increases in interest rates. The Fed raised its benchmark interest rate in December after a seven-year campaign of near-zero interest rates to stoke hiring, spending and investment.
The Fed targets annual inflation of 2%—as measured by the Commerce Department’s price index for personal consumption expenditures—to keep the economy growing at a healthy pace without overheating. That index climbed 1% in the 12 months to February—core prices were up 1.7%—but has missed the Fed’s target for almost four years.
Other measures give a mixed picture of inflation. Prices for imported goods rose last month for the first time since last summer, though they were down 6.2% from a year earlier, the Labor Department reported this week.
The government on Thursday will release the consumer-price index for March. Economists estimate the index rose 0.2% last month.