PPI Shows No Evidence of Inflation
May 11, 2012 by Jon C. Ogg
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
