US core producer prices, jobless claims rise

Prices paid by US factories picked up pace in March as the disruption caused by Japan's earthquake began to be felt in the auto industry and fuel prices rose strongly. Another report on Thursday showed a surprise jump in US jobless claims that raised some questions among investors about the health of the labour market recovery, though economists said the number could be a one-off.
-- Initial claims rise 27,000, above 400,000 mark
Core US producer prices rose slightly faster than expected in March from February and the increase from a year ago was the largest since August 2009. The Labour Department said its seasonally adjusted index for prices paid at the farm and factory gate - excluding volatile food and energy costs - rose 0.3 percent after gaining 0.2 percent in February.
A combination of concerns about higher inflation in the global economy and the unexpected rise in new claims for unemployment benefits helped push down US stock prices. Light trucks prices advanced 0.7 percent, the biggest rise since July and accounted for a third of the gain in the core PPI. Passenger vehicle prices increased 0.9 percent, the largest increase since June 2009.
"It looks like the disruption to global autos production stemming from the Japanese disaster will hit autos supply and, consequently could lead to some further steep price increases over the next few months," said Paul Ashworth, chief US economist at Capital economics in Toronto.
Suppliers axed their discount for vehicles as they anticipated shutdowns hurting supply, said Brian Bethune, chief US financial economist with IHS Global Insight. "They don't want to deplete their inventories too soon," he said. In the 12 months to March, the core producer price index rose 1.9 percent, the biggest increase since August 2009 and speeding up from February's 1.8 percent rise.
A second report from the Labour Department showed initial claims for state unemployment benefits rose 27,000 to a seasonally adjusted 412,000, well above economists' expectations for a fall to 380,000. Economists have noted an increase in claims often at the end of a quarter. The four-week moving average of unemployment claims - a better measure of underlying trends - climbed 5,500 to 395,750.