Wholesale prices surged more than anticipated in April, signaling yet another challenge to lowering interest rates in the near future. According to the Labor Department’s Bureau of Labor Statistics, the produce price index (PPI) saw a 0.5% increase for the month, exceeding the 0.3% estimate by Dow Jones. Notably, the index for March was revised from an initially reported 0.2% gain to a decline of 0.1%.
When excluding the often-volatile food and energy prices, core PPI also saw a 0.5% rise compared to the 0.2% Dow Jones forecast. Further, excluding trade services from that core group showed a 0.4% increase for the month and a notable 3.1% year-over-year rise, the highest seen since April 2023.
The surge in wholesale inflation was primarily driven by services prices, which rose by 0.6%, accounting for roughly three-quarters of the headline gain. This marks the largest monthly increase since July 2023, as reported by the Bureau of Labor Statistics. Portfolio management significantly contributed to the rise in services costs, increasing by 3.9% over the month.
Goods prices, as measured by the PPI, experienced a 0.4% increase, reversing a previous decline of 0.2%. A key driver was a 2% jump in the energy index, including a striking 5.4% surge in gasoline prices. Conversely, the final demand index for food saw a 0.7% decrease.
Stay tuned for more updates on this developing story.
