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The attached file contains this articles commentary as well as tables and charts of the data.

Producer Prices: Core Jumps Due to Investment Services

May 11, 2017
Bottom Line: Producer inflation jumped sharply in April due to increasing price pressures in the services sector. Over a quarter of the increase is attributable to a 6.6% jump in the securities brokerage and investment services sectors. Given trends in that industry this rise would seem anomalous and unlikely to be the beginning of sustained price pressures. Overall price pressures remain modest -- while above the pace of 2016 and 2015, both the finished goods core and the final demand core (which includes services) are holding below the year-over-year pace seen in 2014.

The PPI ROSE by 0.5% in April, compared with market expectations for an increase of 0.2%. Year-over-year producer inflation peaked in June 2011 at 4.44%, then moved with energy price (bottoming in late '15 / early '16 and rising sharply until early '17 due to base effects). Overall producer prices are 2.5% ABOVE the year ago level.

The Goods PPI ROSE by 0.5% in April and is now 4.0% ABOVE its year ago level. Food prices rose by 0.9% and are now 1.7% ABOVE their year ago level. Meanwhile energy prices rose by 0.8%. and are now 14.2% ABOVE their year ago level. The Goods PPI less food and energy ROSE by 0.3%, and is now 2.3% ABOVE its year ago level.

The Services PPI ROSE by 0.4% in April and is now 1.8% ABOVE its year ago level.

The Core PPI ROSE by 0.4%, compared with market expectations for a increase of 0.2%. Core producer prices are now 1.9% ABOVE their year ago level.