Wholesale prices rose less than expected in April, according to a report from the Labor Department on Thursday, providing more hope that inflation is at least underway.
producer price IndexFinal demand, a measure of prices for goods and services, rose 0.2%, beating Dow Jones estimates of 0.3% and after declining 0.4% in March. The core PPI, excluding food and energy, also rose 0.2%, in line with expectations. Core reading was similar except for business.
On an annual basis, the headline PPI rose just 2.3%, down from 2.7% in March and the lowest reading since January 2021.
Although the PPI increase was lower than expected, the services index rose 0.3%, the biggest move since November 2022, the Bureau of Labor Statistics report said.
A separate report from the Labor Department on Thursday showed that Unemployment allowance Jumped to 264,000 for the week ending May 6, an increase of 22,000 from the previous period. The total was well above the Dow Jones estimate for 245,000 and the highest reading since October 30, 2021. Continuing claims rose to 1.81 million.
“This morning’s PPI release indicates that prices are easing,” said Quincy Crosby, chief global strategist at LPL Financial, who is concerned about an upward trend in prices paid to the market. “The release of higher-than-expected initial jobless claims, similarly market-friendly as the flexible labor landscape, underpinning higher wages, is showing signs of easing.”
however, Stock market futures were mixed Wall Street worries over debt limit impasse in Washington after data release.
The reports come as the Federal Reserve is using its policy levers to tame inflation that ran at a 41-year high last summer. Central bankers have raised their benchmark interest rate 10 times through March 2022, while reducing bond holdings that at one point reached $9 trillion.
The Labor Department said in a release on Wednesday consumer price IndexThe inflation rate, a popular gauge of the prices that consumers pay for goods and services, rose 0.4% in April, which equates to a 4.9% annual inflation rate. The latter number was the lowest reading since April 2021.
The PPI differs from the CPI because it measures the prices producers pay for the goods and services they need.
The report showed that nearly one-third of the increase in PPI services came from “portfolio management” services, which measure prices for investment advice, and rose 4.1%. Gasoline prices rose 8.4%, leading the goods index 0.2% higher.
Other notable increases came from wholesale sales of food and alcohol, outpatient care, and loan services. Long distance motor transport decreased and the cost of chicken eggs dropped by 37.9%.