Wholesale inflation rose 11% in April as producer prices continue to accelerate

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A worker loads a coil of aluminum onto a truck at Arconic’s manufacturing facility in Alcoa, Tennessee, Wednesday, March 9, 2022.

Luke Sharret | Bloomberg | Getty Images

Wholesale prices accelerated further in April, part of a broader inflation problem lingering in the U.S. economy, the Bureau of Labor Statistics reported Thursday.

the producer price indexwhich tracks how much manufacturers get for products when they are first sold, was up 0.5% on the month and 11% from a year ago, down from a record high of 11.5 % in March.

Excluding food, energy and commercial services, the core PPI rose 0.6% in April and 6.9% from a year ago, the latter down from 7.1% in April. last month.

Both monthly increases were exactly in line with Dow Jones estimates. The overall PPI rose 1.6% in March, while the core rose 0.9%.

The numbers came the day after the BLS reported that consumer prices for goods and services in the market rose 8.3% from a year ago, compared to 8.5% in March, but still indicative of the worst inflation the United States has seen since the early 1980s.

A separate economic report on Thursday showed that unemployment insurance claims totaled 203,000 for the week ending May 7, an increase of 1,000 over the previous period. That was above the Dow Jones estimate for 194,000.

Continuing claims fell, however, from 44,000 to 1.343 million, the lowest level since January 3, 1970.

Although the news has been largely good for the labor market, it is inflation that has troubled policymakers the most and threatens to thwart the expansion. This week, President Joe Biden repeatedly spoke about the meteoric price increases during his administration and offered several proposals to address the problem.

Gasoline and groceries were responsible for much of the surge in inflation, with the indices trailing the two sectors up 1.7% and 1.5% respectively in April, according to PPI data. Auto prices, particularly for used vehicles, have also been a major component of inflation, and the PPI index for motor vehicles and equipment rose 0.8% during of the month.

The gasoline index fell 3.2% in April as prices at the pump fell. However, this trend has since reversed, with gasoline prices returning to record highs.

While Biden pledged to act at the legislative level, he also highlighted the role of the Federal Reserve. The Fed last week approved a half-percentage point hike in its benchmark interest rate, the second increase this year and more are expected.

Market prices on Thursday morning indicated a likely additional half-point rise in June and the year ending with the fed funds rate around 2.5% to 3% from its current target range of 0. .75 to 1%, depending a CME Group futures tracker.

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