Wholesale inflation may be on the rise, depending on how you view this. The U.S. Labor Department has released its March Producer Price Index showing that the headline PPI was down 0.6%, while the core rate of wholesale inflation on an ex-food and energy basis rose by 0.2%. The headline estimates were -0.2% from Bloomberg and -0.4% from Dow Jones. Estimates on the Core PPI were +0.2% from both Bloomberg and Dow Jones.
The large culprit for the headline drop was the drop in energy (oil) prices. We also saw on Thursday that import and export prices were signaling weak headline data. It is somewhat troubling that the core rate is on the rise, even if it was expected, but we will try to reason that maybe this was a carryover effect on prices from higher energy prices the month before being passed through on finished goods in March.
Food prices were up by 0.8%, and that was tied to weather in the Southwest driving up vegetable costs substantially. Wholesale gasoline prices were down almost 7% in the month, and by now we all know how much this affects everything else.
S&P 500 futures are down five points and DJIA futures are down by 58 points this morning as investors are taking profits ahead of the weekend.