U.S. Producer Prices Inch Up 0.2% In April, Annual Growth Slows To 2.3%
A report released by the Labor Department on Thursday showed a modest increase in U.S. producer prices in the month of April.
The Labor Department said its producer price index for final demand inched up by 0.2 percent in April after falling by a revised 0.4 percent in March.
Economists had expected producer prices to rise by 0.3 percent compared to the 0.5 percent drop originally reported for the previous month.
The report also showed the annual rate of producer price growth slowed to 2.3 percent in April from 2.7 percent in March. The pace of growth was expected to slow to 2.4 percent.
The modest monthly rebound in producer prices was largely due to an increase in prices for services, which rose by 0.3 percent in April after edging down by 0.1 percent in March.
While prices for transportation and warehousing services tumbled by 1.7 percent, prices for trade and other services increased by 0.5 percent and 0.4 percent, respectively.
The report also said prices for goods crept up by 0.2 percent in April after slumping by 1.0 percent in the previous month.
Energy prices climbed by 0.8 percent in April after plunging by 6.0 percent in March, while food prices fell by 0.5 percent after rising by 0.3 percent.
Excluding food and energy prices, prices for goods edged up by 0.2 percent for the second consecutive month.
The Labor Department also said core producer prices, which exclude prices for food, energy and trade services, rose by 0.2 percent in April after inching up by 0.1 percent in March.
The annual rate of growth by core producer prices slowed to 3.4 percent in April from 3.7 percent in March.
“Slower producer price inflation contributes to getting consumer price inflation under better control, so this report is a good sign for future improvements in CPI inflation,” said FHN Financial Macro Strategist Will Compernolle.
“The acceleration in April core consumer goods prices, seen yesterday, stemmed largely from an increase in prices for used autos,” he added. “Outside that, and paired with consecutive months of PPI data suggesting much better alignment between suppliers and consumer demand, goods price inflation should keep trending in the right direction.”
A separate report released by the Labor Department on Wednesday showed consumer prices in the U.S. increased in line with economist estimates in the month of April.
The Labor Department said its consumer price index climbed by 0.4 percent in April after inching up by 0.1 percent in March. Economists had expected consumer prices to rise by 0.4 percent.
Excluding food and energy prices, core consumer prices also rose by 0.4 percent in April, matching the increase seen in March as well as economist estimates.
The report also showed the annual rate of consumer price growth edged down to 4.9 percent in April from 5.0 percent in March. Economists had expected the year-over-year growth to be unchanged.
The annual rate of core consumer price growth also slipped to 5.5 percent in April from 5.6 percent in March. The modest slowdown matched economist estimates.
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