In another sign that inflation in the US is running red-hot, producers passed down significantly higher costs to companies in April for a wide-range of products, amid ongoing dovish monetary and fiscal policies.
According to the Bureau of Labour Statistics, the Producer Price Index (PPI) jumped 0.6% in March, and surged 6.2% from last year’s levels, marking the sharpest increase since data collection for the index began in 2010. The latest print significantly outpaces that of consensus estimates, as economists surveyed by FactSet forecast a monthly increase of 0.3% and a 3.8% jump year-over-year.
The core PPI, which does not account for volatile categories such food, energy, and trade services, rose 0.7% last month, and was up 4.6% from April 2020 levels. The year-over-year increase marked the largest jump since the department first began such calculations in 2014. A sharp increase in steel mill products was the main contributor to the blistering print, while prices for beef and veal, pork, residential natural gas, plastic resins and materials and dairy products also increased in April.
The PPI, which measures the prices paid to producers rather than prices at the consumer level, further attests to the broader price pressure acceleration that is becoming increasingly evident across the US. The latest figures follow Wednesday’s blowout consumer prices report, which showed that CPI exploded by 4.2%— the most since 2008.
Despite growing signs that the US economy’s check engine light is very well on and glowing red, the Federal Reserve continues to insist that it all is just “transitory.”
Information for this briefing was found via the Bureau of Labour Statistics. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
