Producer prices spike more than expected
(The Center Square) – Newly released federal inflation data shows that producer prices spiked last month.
The U.S. Bureau of Labor Statistics on Tuesday released its Producer Price Index, a key marker of inflation, which showed a sizable increase in April.
The PPI rose 0.5% last month, the biggest increase in months and more than many experts predicted.
“Stripping out food and energy, PPI was still a hot print, and you can clearly see the pace of increase since Jun ’22 has consistently been hotter than the pre-pandemic trend, after rocketing higher [between] Jan ’21 and Jun ’22,” Heritage Foundation Economist E.J. Antoni wrote on X, formerly known as Twitter.
The prices varied across categories.
“The index for final demand services moved up 0.6% in April, the largest rise since jumping 0.8% in July 2023,” BLS said. “Seventy percent of the April increase can be traced to prices for final demand services less trade, transportation, and warehousing, which advanced 0.6 percent. Margins for final demand trade services rose 0.8%. … In contrast, prices for final demand transportation and warehousing services decreased 0.6%.”
Energy costs were an important driver of the inflation increase.
“Prices for final demand goods rose 0.4% in April after decreasing 0.2% in March,” BLS said. “Most of the advance is attributable to the index for final demand energy, which moved up 2%. Prices for final demand goods less foods and energy increased 0.3%. In contrast, the index for final demand foods declined 0.7%.”
The federal pricing data comes as small business owners lament the rising prices.
As The Center Square previously reported, the National Federation of Independent Businesses released a survey of small business owners which showed they cite inflation as their top business concern.
NFIB reported that about 22% of small business owners cited inflation as their top concern in running their business, and that small business optimism remains low at “the 28th consecutive month below the 50-year average.”
