Haver Analytics
Haver Analytics
| May 14 2024

U.S. Producer Price Strength in April is Pronounced; March Revised Lower

  • Core goods prices rise moderately.
  • Services prices surge after a slight decline.
  • Energy prices jump, but food prices decline.

The Producer Price Index for final demand increased 0.5% (2.2% y/y) during April after easing 0.1% in March, revised from a 0.2% increase, according to the Bureau of Labor Statistics. A 0.3% gain had been expected in the Action Economics Forecast Survey. The PPI excluding food and energy strengthened 0.5% (2.4% y/y) after easing 0.1% in March. It was the largest increase in three months. A 0.2% rise had been expected. Producer prices excluding food, energy & trade services rose 0.4% (3.1% y/y) in April following increases of 0.2% and 0.4% in the prior two months.

Final demand energy prices rose 2.0% last month (1.0% y/y) after a 1.3% decline. Gasoline prices rose 5.4% (-1.9% y/y) after falling 3.0% in March. Electric power prices rose 0.3% (4.5% y/y) following a 0.7% increase. Food prices were off 0.7% (+0.5% y/y) after increasing 0.4% in March. The gain reflected a 7.3% increase (-7.5% y/y) in fruit & melon prices as well as an 11.2% increase (21.7% y/y) in fresh egg prices. Offsetting these increases, beef & veal costs fell 5.9% (+10.8% y/y) and fresh & dried vegetable prices eased 18.7% (NSA, -23.9% y/y). Grain prices weakened 4.5% (-35.6% y/y).

Prices for goods less food & energy rose 0.3% (1.6% y/y) in April after holding steady in March. Finished consumer goods prices increased 0.1% (1.9% y/y) for a second straight month. Core nondurable goods prices rose 0.1% (2.4% y/y) after holding steady in March. Durable consumer goods prices also edged 0.1% higher (1.1% y/y) after rising 0.3% in March. Capital equipment prices rose 0.2% (2.8% y/y), the weakest increase in four months, while government purchased goods prices rose 0.3% (2.1% y/y).

Prices for final demand services increased 0.6% last month (2.7% y/y) after easing 0.1% in March. Trade services prices strengthened 0.8% (-0.3% y/y) after a 1.0% decline. Prices for final demand transportation and warehousing services fell 0.6% (+0.3% y/y) after a 0.2% increase. Services prices less these costs increased 0.6% (4.4% y/y) following two straight 0.3% increases. Prices of travel accommodation services strengthened 2.4% (-1.2% y/y).

Construction costs rose 0.1% in April (-0.8 y/y) for the second consecutive month.

Prices for intermediate demand processed goods increased 0.6% (-0.5% y/y) in April after falling 0.5% in March. Processed energy goods prices rose 1.6%, while food prices were off 0.2%. The index for intermediate demand unprocessed goods jumped 3.2% (-4.6% y/y).

The PPI data are published by the Bureau of Labor Statistics and can be found in Haver’s USECON database. Further detail is contained in PPI and PPIR. The expectations figures are available in the AS1REPNA database.

  • Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio.   Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984.   He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C.   In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists.   Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.

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