The Labor Department is out with the wholesale inflation data or the Producer Price Index for April. Inflation was at bay with a reading of -0.2% on the headline data for April, but this was up by +0.2% on the core PPI reading which takes out food and energy. Bloomberg had estimates of 0.0% or flat on the headline data and +0.2% on the core reading.
What is interesting about the reading here is that today’s release was going to be largely ignored if it came in a bit hot. The reason is simple, and that is because the price of energy and other commodities have come down substantially in the last week and a half. Today’s data also came in as the lowest readings of the higher trends in prior months.
Energy prices were down by -1.4%, with crude goods at -4.4%. It usually takes a couple or few months of higher producer prices before those prices get pushed down to consumers. That being said, the inflation hawks are going to have to take a breather for at least today and tomorrow.
JON C. OGG