WASHINGTON — Final demand PPI rose by 0.1% in April, slower than the 0.2% gain expected, with an as-expected 0.2% gain outside of food and energy prices, data released by the Bureau of Labor Statistics Wednesday showed.
The month/month gains were smaller than those seen in April 2017, which resulted in sharp declines in the year/year rates. This could be reversed next month, as gains in May 2017 were much smaller.
The personal consumption price measure in the data, which some analysts use a preview measure for the PCE price index, fell by 0.1% overall and excluding food and energy, and were flat excluding trade services, suggesting some downside risk to the consumer inflation data.
Within the core, there was little movement in the usually volatile passenger car and light truck categories, while services showed a mix of rising brokerage services prices offset by falling legal services prices.
Energy prices rose 0.1% in April after declines in the previous two months, led by a 4.0% gain in petroleum gas prices and a 1.8% rise in diesel fuel prices. Partially offsetting these gains were a 0.4% decline in gasoline prices and a 0.5% drop in electric power prices.
Food prices fell 1.1% after a 2.2% surge in March. The categories that drove the March increase — particularly finfish, vegetables, and eggs — pulled back in April.
Trade services prices rose 0.2% in the month, while the PPI core rate the BLS prefers, which excludes the change in trade services as well as food and energy, rose 0.1% in April.
The year/year rates for these measures indicated significant deceleration due in large part to base factors from an April 2017 surge. Overall PPI was up 2.6% year/year in April after a 3.0% year/year rise in March.
At the same time, the year/year rate for PPI excluding food and energy slowed to 2.3% from 2.7% in March, while the year/year rate for PPI excluding food, energy and trade services slipped to 2.5% from 2.9%.
