Are you keeping a close eye on the economy? Well, you’ll want to pay attention to the latest wholesale price data that was just released. Wholesale prices surged more than expected in April, which may impact potential interest rate cuts in the near future.
The producer price index, a key indicator of prices at the wholesale level, rose by 0.5% in April, exceeding the 0.3% estimate from Dow Jones. However, the March reading was revised down from a 0.2% gain to a 0.1% decline, indicating some volatility in the market.
When we look at the core PPI, which excludes food and energy prices, we see a similar trend. The core PPI also increased by 0.5%, surpassing the 0.2% estimate from Dow Jones. Excluding trade services from this core group showed a 0.4% increase for the month and a 3.1% increase on a 12-month basis, the highest level since April 2023.
Year-over-year, wholesale inflation rose by 2.2%, marking the highest level in a year. The core PPI inflation was at 2.4%, the biggest annual move since August 2023. Both of these numbers were in line with estimates from Reuters.
Stock market futures were relatively stable following the data release, while Treasury yields showed mixed results. This data may impact the Federal Reserve’s decision regarding interest rates, as policymakers have indicated they need more evidence that inflation is moving towards their 2% goal before considering rate cuts.
It’s worth noting that recent inflation data has been higher than expected, with the consumer price index and the personal consumption expenditures price index both showing inflation running hot. Various consumer surveys have also indicated higher inflation expectations, suggesting that price pressures are ahead of the Fed’s target.
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