PiCK
US April Producer Prices Jump 1.4% on Month as Iran-Driven Oil Shock Lifts Costs
Summary
- The U.S. said its April Producer Price Index (PPI) rose 1.4%% from a month earlier, far exceeding economists’ forecast of 0.5%%.
- From a year earlier, PPI rose 6.0%% and core PPI increased 5.2%%, both above market expectations.
- Producer prices are viewed as a leading indicator of consumer prices and are also included in calculating the PCE price index, drawing close attention from Wall Street.
Rising global oil prices tied to the war involving Iran pushed U.S. producer prices in April well above market expectations.
The Producer Price Index rose 1.4% in April from the previous month, the Labor Department’s Bureau of Labor Statistics said on May 13. The gain was nearly triple the 0.5% increase expected by economists.
From a year earlier, the index climbed 6.0%, exceeding the 4.9% forecast by 1.1 percentage points.
Core producer prices, which exclude volatile energy, food and trade services, rose 1.0% from a month earlier, also above the 0.3% estimate. From a year earlier, core PPI increased 5.2%, topping the 4.3% market forecast by 0.9 percentage point.
Producer prices, also known as wholesale prices, are typically reflected in final consumer prices after a lag. That is why they are regarded as a leading indicator of consumer inflation.
Some PPI components are also included in calculating the Personal Consumption Expenditures price index, which the Federal Reserve uses as a gauge for monetary policy. That is one reason Wall Street watches the report closely.
JOON HYOUNG LEE
gilson@bloomingbit.ioCrypto Journalist based in Seoul
