PPI: Energy Prices and Core Inflation Increase

May 13, 2016
Bottom Line: Producer inflation climbed in April, less than expectations. Energy prices continue to increase, rising 0.2% after jumping 1.8% in March while final demand services rose slightly. Core prices also rose slightly, in line with expectations and have risen modestly on a year-over-year basis. Overall inflationary pressures at the producer level still remain subdued. The PPI ROSE by 0.2% in April, compared with market expectations for an increase of 0.3%. Year-over-year producer inflation peaked in June 2011 at 4.44%. Slowing since then has been because of lower energy prices. Overall producer prices are 0.1% ABOVE the year ago level. The Goods PPI ROSE by 0.2% in April but is still 1.9% BELOW its year ago level. Food prices fell by 0.3% and are 2.0% BELOW their year ago level. Meanwhile energy prices rose by 0.2% but are still 11.7% BELOW their year ago level. The Goods PPI less food and energy ROSE by 0.3%, and is now 0.5% ABOVE its year ago level. The Services PPI ROSE by 0.1% in April and is now 1.1% ABOVE its year ago level. The Core PPI ROSE by 0.1%, in line with market expectations. Year-over-year core producer inflation has retreated modestly since December 2014. Core producer prices are now 0.9% ABOVE their year ago level.
Article by contingentmacro