The US Producer Price Index rose by 1.4% in April following a 0.7% gain in March, well above the 0.5% gain expected in a survey compiled by Bloomberg as of 7:35 am ET.
Energy prices increased by 7.8% in the month, slower than a 10.1% gain in March. Gasoline prices slowed to a 15.6% gain from 19.2% gain in March but still indicates rapid price acceleration. Food prices rebounded by 0.2% after a 0.6% decline in the previous month.
After excluding food and energy prices, core PPI jumped by 1.0% from 0.2% gain in the previous month, well above the 0.3% gain expected.
PPI was up 6.0% year-over-year in April while core PPI rose by 5.2% year-over-year, both well above their respective March rates and the strongest readings since December 2022. The year-over-year rate for PPI excluding food, energy and trade services increased to 4.4% from 3.7% in the previous month, the fastest rate since February 2023.
The monthly producer price index, or PPI, reported by the Bureau of Labor Statistics measures the index level of prices received by producers for products such as energy, food, vehicles, and services. The core measure, excluding the volatile food and energy components, is a measure of underlying inflation.
Sharply higher prices are a sign of demand, but an increase at the producer level without a pass-through to the consumer level would suggest smaller profits at the retail level. As a result, the stock reaction depends on the movements at both levels. Higher inflation is generally a negative for bonds.