WASHINGTON -- U.S. wholesale prices edged up 0.2% in April, driven higher by a big jump in energy costs, but less than forecast.
The Labor Department says the increase in its producer price index, which measures inflation pressures before they reach the consumer, followed an even bigger 0.6% March increase.
Wholesale prices are up 2.2% over the past year while prices, excluding volatile food and energy, have risen 2.4%. Inflation pressures remain under control, a fact that has allowed the Federal Reserve to move to the sidelines in terms of pushing interest rates higher. After four rate increases in 2018, Fed officials have indicated they expect no further rate increases this year.
For April, energy prices jumped 1.8% after an even bigger 5.6% percent March gain. Gasoline prices were up 5.9%.
The figures, which measure wholesale and other selling costs at businesses, offer an indication that inflation pressures are slightly weaker in the economy than thought. The report showed monthly declines in categories including thermoplastic resins and materials, traveler accommodation services and margins for some retail sectors.
Most of the April advance in the services index was because of portfolio management prices, which jumped 5.3% from March, the Labor Department said.
April consumer-price data to be released today are forecast to show pickups in core and overall inflation.
President Donald Trump and his administration have kept up pressure on the Fed for a reduction in borrowing costs to supercharge the economy.
The wholesale-price report actually validates Federal Reserve Chairman Jerome Powell's characterization of some inflation forces as transitory, according to Jim O'Sullivan, chief U.S. economist at High Frequency Economics. While the headline and core figures were "pretty tame," he said, some components that are incorporated in the Fed's preferred inflation gauge, tracking personal consumption, were relatively strong.
JPMorgan Chase's Daniel Silver said in a note that the data signal the core personal consumption expenditures price index "likely will firm relative to its recent trend." He noted gains in portfolio management and domestic air transportation, categories Powell cited in his last news conference as transitory factors that had been weighing on inflation.
A separate Labor Department report Thursday showed filings for unemployment benefits fell by less than estimated last week, keeping claims slightly elevated compared with the recent average. That may continue to reflect the late timing of the Easter and Passover holidays this year and associated spring vacations for Americans.
Producer prices for goods rose 0.3% after gaining 1% the previous month. Services prices increased 0.1% after a 0.3% gain. Food costs fell 0.2%.
While the consumer price index is considered a more important indicator of inflation, data on producer prices help provide insights into the direction of input costs, and analysts monitor this data to assess how the gains will filter through to consumers.
Information for this article was contributed by Martin Crutsinger of The Associated Press and by Reade Pickert and Scott Lanman of Bloomberg News.
Business on 05/10/2019
Print Headline: Energy fuels wholesale-price rise