Producer Prices Moderate in April

Wells Fargo Research Team Wells Fargo

Producer price inflation rose 0.1 percent in April and moderated to 2.6 percent on a year-ago basis. More temperate gains across categories suggest that while inflation is strengthening, the pickup remains orderly.

Inflation Far From Becoming Unhinged

Producer prices rose at a more tepid pace in April, increasing 0.1 percent. On a year-ago basis, the PPI slipped to 2.6 percent. Our preferred measure of core PPI slowed to 2.5 percent, but is up from 2.0 percent last April. While the trend in inflation remains upward, inflation is far from becoming unhinged.
Prices for goods were unchanged in April as a 1.1 percent drop in food prices offset higher energy and core goods prices.

Service Costs Slow in April, but Input Prices Rising

After gains of at least 0.3 percent each month in Q1, services inflation cooled to a 0.1 percent rise in April. The weaker print can be traced to a pullback for core services, while prices for trade services and transportation advanced in line with March.
Prices further back in the pipeline rose last month, but have eased on trend for unprocessed goods over the past year. In contrast, services continue to see input price pressures gradually rise.

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