Producer price index data out Tuesday showed that inflation ran hotter in April, but downward revisions to earlier data assuaged concerns. Meanwhile, health care prices, the biggest input to the Federal Reserve’s primary core inflation rate, moderated a bit as airfares fell. After the PPI data, the S&P 500 edged higher in morning stock market action, ahead of Wednesday’s key consumer price index and retail sales reports.
PPI Data
The PPI for final demand rose 0.5% on the month and 2.2% from a year ago. Wall Street economists anticipated a 0.2% monthly rise and a 2.2% gain from a year ago, according to Econoday.
The upside surprise on the monthly data but in-line annual increase implies downward revisions to prior data. The headline PPI for March was revised to -0.1% from 0.2%.
Excluding food and energy, the PPI rose 0.3% on the month vs. 0.2% forecasts. However, March data also was revised to -0.1% from 0.2%.
Jed Graham | Investor’s Business Daily