Wholesale prices jumped more than expected in April, putting up another potential roadblock to interest rate cuts anytime soon.
The produce price index, a measure of what producers receive for the goods they produce, increased 0.5% for the month, higher than the 0.3% Dow Jones estimate, the Labor Department’s Bureau of Labor Statistics reported Tuesday. However, the March reading was revised from an initially reported 0.2% gain to a decline of 0.1%.
Stripping out volatile food and energy prices, core PPI also increased 0.5% compared to the 0.2% Dow Jones estimate. Excluding trade services from that core group showed a 0.4% increase on the month and 3.1% on a 12-month basis, the highest level since April 2023.
Services prices boosted the wholesale inflation reading, rising 0.6% and accounting for about three-quarters of the headline gain, while the final demand goods index increased 0.4%. The services increase was the biggest monthly gain since July 2023, the BLS reported.
Portfolio management in turn helped drive the services costs, rising 3.9% on the month.
Goods prices as measured by the PPI rose 0.4%, reversing a 0.2% decline, fed by a 2% increase in the energy index, which included a 5.4% surge in gasoline prices. The final demand index for food fell 0.7%.
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