US producer price index up by 0.5% in April

By Aya Anwar On May 14, 2024

The US Bureau of Labour Statistics has announced a notable uptick in the Producer Price Index (PPI) for final demand, which rose by 0.5 per cent in April, marking a significant turnaround from the 0.1 per cent decline observed in March and the 0.6 per cent increase in February.

This surge represents the largest monthly increase since the 2.3 per cent rise recorded in April 2023. Over the 12 months ending in April, the index for final demand rose by 2.2 per cent, indicating the fastest rate of increase since the same period last year.

The substantial April advance in final demand prices was predominantly driven by a 0.6 per cent increase in the index for final demand services, with prices for final demand goods also experiencing a moderate uptick of 0.4 per cent.

Notably, the index for final demand, excluding foods, energy, and trade services, rose by 0.4 per cent in April, following a 0.2 per cent increase in March.

Over the 12 months ending in April, this particular index saw a robust increase of 3.1 per cent, marking its highest advance since April 2023.

Moreover, within the category of final demand services, the April increase of 0.6 per cent was primarily fueled by rises in prices for services excluding trade, transportation, and warehousing, which climbed by 0.6 per cent.

Conversely, prices for transportation and warehousing services experienced a slight decline of 0.6 per cent. Notable contributors to the April surge in final demand services include portfolio management, machinery and equipment wholesaling, residential real estate services, and automobile retailing.

Final demand goods also witnessed a 0.4 per cent increase in prices, largely attributed to a notable 2.0 per cent rise in the index for final demand energy. However, prices for final demand foods experienced a decline of 0.7 per cent.

The surge in final demand goods was significantly influenced by a sharp 5.4 per cent increase in gasoline prices, while prices for fresh and dry vegetables notably decreased by 18.7 per cent.