After yesterday’s report showing much faster than expected consumer price growth, the Labor Department released a report on Thursday showing producer prices also increased by more than expected in the month of April.
The Labor Department said its producer price index for final demand rose by 0.6 percent in April after jumping by 1.0 percent in March. Economists had expected producer prices to increase by 0.3 percent.
The report also showed the annual rate of producer price growth accelerated to 6.2 percent in April from 4.2 percent in March, with prices showing the biggest annual increase since 12-month data were first calculated in November of 2010.
About two-thirds of the monthly advance in producer prices can be traced to a 0.6 percent increase in prices for final demand services. The index for final demand goods also moved up by 0.6 percent.
Excluding prices for food, energy, and trade services, core producer prices, increased by 0.7 percent in April after climbing by 0.6 percent in March. Core prices were expected to rise by 0.4 percent.
The Labor Department said core producers were up by 4.6 percent compared to the same month a year ago, reflecting the largest advance since 12-month data were first calculated in August 2014.
“We expect upward price pressures to persist in the near term before supply constraints are resolved and base effects fade,” said Mahir Rasheed, Associate US Economist at Oxford Economics.
“Since we believe much of the acceleration in inflation will be transitory, we share the Fed’s view that this isn’t the start of an upward inflationary spiral,” he added. “We look for the pace of inflation to gradually cool heading into 2022.”
On Wednesday, the Labor Department released a separate report showing U.S. consumer prices increased by much more than expected in the month of April.
The Labor Department said its consumer price index climbed by 0.8 percent in April after rising by 0.6 percent in March. Economists had expected consumer prices to inch up by 0.2 percent.
Excluding food and energy prices, core consumer prices also advanced by 0.9 percent in April following a 0.3 percent uptick in March. Core prices were expected to rise by another 0.3 percent.
With the much bigger than expected monthly increase, consumer prices in April were up by 4.2 percent compared to the same month a year ago, reflecting the biggest jump since September of 2008.
Core consumer prices surged up by 3.0 percent year-over-year, marking the biggest annual increase since January of 1996.
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