Inflation affecting American producers showed a broader uptick in April, with the headline month-over-month figure far exceeding estimates Tuesday, one day before the critical consumer inflation report is released.
The Producer Price Index (PPI) shows an increase of 0.5% in April compared to March, reaching its highest level in a year.
April PPI Report: Key Highlights
- The headline PPI surged by 2.2% in April 2024 on a year-over-year basis, surpassing the previous downwardly revised annual rate of 1.8% and matching expectations of 2.2%.
- The month-on-month increase in the headline PPI was 0.5% in April, marking an acceleration from the downwardly revised 0.1% drop and topping estimates of 0.3%.
- The PPI for goods witnessed a 0.4% monthly increase, affected by a 2% rise in the energy item.
- The PPI for services saw a 0.6% monthly surge, with the trade item rising by 0.8%.
- The core PPI, which excludes food and energy, held steady at 2.4% annually, as expected.
- On a monthly basis, the core PPI jumped 0.5%, accelerating from the previous downwardly revised 0.1% drop and topping estimates of 0.2%.
Prior to the PPI release, traders had priced in nearly 50 basis points of Fed rate cuts by year end.
Treasury yields rose across the board, with the rate-sensitive two-year yield up 4 basis points to 4.88% as of 8:33 a.m. in New York.
The U.S. dollar index (DXY), as tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE: UUP), strengthened 0.2%.
Futures on major U.S. stock indices trended lower on Tuesday premarket trading. On Monday, the SPDR S&P 500 ETF Trust (NYSE: SPY) closed flat.
Gold, as tracked by the SPDR Gold Trust (NYSE: GLD), rose 0.5% to $2,343 per ounce.