US wholesale prices rose sharply in April, indicating persistent inflation pressures. The producer price index climbed 0.5% from March to April, marking the biggest increase in a year. (AP/Joshua A. Bickel)
- Underlying inflation, excluding food and energy, also jumped 0.5%.
- Some wholesale prices fell, suggesting potential cooling of consumer inflation.
- Last month, wholesale prices were pushed higher by more expensive gas, electricity, and freight shipping.
Share
Getting your Trinity Audio player ready...
|
WASHINGTON — U.S. wholesale prices rose sharply last month, a sign that inflation pressures remain stubbornly high after three elevated readings in consumer prices to start the year.
The Labor Department said Tuesday that its producer price index — which tracks price changes before they reach consumers — climbed 0.5% from March to April, after it dipped 0.1% the previous month. Measured year over year, producer prices rose by 2.2% in April, up from 1.8% in March and the biggest increase in a year.
Underlying Inflation Measures
A measure of underlying inflation, which excludes the volatile food and energy categories, also jumped 0.5% from March to April, and rose 2.4% compared with a year earlier. Economists closely watch core prices because they provide a better signal of where inflation is headed than the overall figure.
Tuesday’s unexpectedly high readings may raise concerns on Wall Street, at the Biden White House and for inflation-fighters at the Federal Reserve. Last week Fed officials underscored that they were prepared to leave their key interest rate at 5.3%, the highest in 23 years, as long as needed to bring inflation back to its 2% target. Consumer price inflation has fallen steadily since late 2022 but stalled at an elevated level in the first three months of this year.
Related Story: US Consumer Sentiment Drops to 6-Month Low on Inflation, Unemployment Fears
Wholesale Prices and Consumer Inflation
At the same time, some wholesale prices fell in ways that suggest consumer inflation could cool a bit this month. A measure of air fares fell 3.8%, and food prices dropped 0.7%. Vegetable costs plunged 18.7%, just between March and April. Hospital prices also declined.
That data, as well as some other figures, feed into the Federal Reserve’s preferred measure of consumer prices, which will be released toward the end of this month. Economists estimate that figure may come in a bit lower than the previous month because of declines in items like air fares.
“In that respect, April’s news was mixed but, on balance, encouraging,” Paul Ashworth, an economist at Capital Economics, wrote in a research note.
Related Story: Federal Reserve Says Interest Rates Will Stay at Two-Decade High Until ...
Upcoming Consumer Inflation Data
On Wednesday, the government will release the latest consumer inflation data, which will command much greater attention from investors and economists. Analysts forecast it will slip slightly, to an annual rate of 3.4%, from 3.5% in March, after rising for two months. Core inflation is forecast to fall to 3.6% from 3.8%.
Last month, wholesale prices were pushed higher by more expensive gas, electricity, and freight shipping. A quirky measure of the cost of managing stock portfolios for investors also rose sharply, elevating the overall index.
Persistent inflation has discouraged consumers, whose confidence has fallen in recent months, and threatens President Joe Biden’s reelection bid.
The producer price index can provide an early read on where consumer inflation is headed. It is also closely watched because some of its data is used to compile the Fed’s preferred inflation gauge, known as the personal consumption expenditures price index.
RELATED TOPICS:
How Many Smoke Shops Is Too Many? Fresno Plan Would Allow Only 49
30 mins ago
Who With Valley Ties Could Land Spots in the Trump Administration?
1 hour ago
Tulare Gang Member Gets Life Without Parole for 2022 Murders
3 hours ago
Who With Valley Ties Could Land Spots in the Trump Administration?
3 hours ago
Mike Tyson-Jake Paul: How to Watch the Fight, Time, Odds
4 hours ago
Travel in the West Bank Is a Tale of Two Journeys
4 hours ago
Chris Wallace Is Leaving CNN, Eager to Explore New Media Landscape
5 hours ago
Merced’s Iconic Laura Fountain Returns to Splendor With $300K Restoration
5 hours ago
Fresno County Man Accused of Filing Fake Disability Claims in $300K Fraud Scheme