US producer prices accelerated sharply in April. Data released by the Bureau of Labor Statistics on May 13 showed that final demand PPI rose 1.4% month over month on a seasonally adjusted basis, above March’s 0.7%. On an annual basis, unadjusted final demand PPI increased 6.0%, the highest reading since December 2022. The release came one day after a stronger CPI print, adding fresh pressure to expectations that inflation was easing.
Core producer inflation stayed firm across the supply chain
Excluding food, energy, and trade services, core PPI rose 0.6% in April and 4.4% from a year earlier. The report suggested that price pressure was not confined to one volatile category. It was spread across a wider set of upstream inputs and services. Because PPI is often watched as an early signal for consumer prices, the persistence in the core measure kept attention on the inflation outlook.
Energy and logistics costs drove much of the monthly jump
By category, goods prices climbed 2.0% in April. The energy index surged 7.8% and accounted for more than three-quarters of the increase in goods. Gasoline posted the biggest move, with a 15.6% monthly increase. Jet fuel and diesel also moved higher. One notable exception was eggs, which fell 49.7% during the month.
Services prices also advanced, rising 1.2% in April and contributing nearly 60% of the overall PPI gain. Within that category, trade services increased 2.7%, while transportation and warehousing services rose 5.0%. That combination pointed to inflation pressure extending beyond raw materials into freight and business services.
Upstream crude gains add to focus on the Fed’s next move
Measures of intermediate demand also showed firm cost pressure. Unprocessed goods rose 4.1% month over month in April, marking a sixth straight monthly increase, while the annual increase reached 20.9%. Crude petroleum prices alone jumped 11.3% in the month. Rising upstream input costs suggest that refiners and manufacturers are still absorbing higher expenses.
With CPI and PPI both coming in hot on consecutive days, market expectations for a near-term Fed rate cut weakened again. The source article also noted an earlier warning from Fed official Austan Goolsbee about an overheating economy. That left investors reassessing the prospect of rates staying higher for longer, a backdrop that can weigh on crypto and US equities.