USD: US April PPI Inflation Hits Expected 2.2%
US PPI Data for the April month came at 2.2% YoY versus 1.8% printed in the March month, Core PPI data for the month of April came at 2.4% YoY, Monthly basis 0.50% came at both in Core and Normal PPI data. The data sparks US Dollar to move higher against counter pairs today.
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According to data released by the US Bureau of Labor Statistics on Tuesday, the Producer Price Index (PPI) for final demand in the United States increased by 2.2% on a yearly basis in April. This figure represents a slight uptick from the revised 1.8% rise recorded in March (previously reported as 2.1%) and aligns with market expectations.
The annual core PPI, which excludes volatile food and energy prices, also saw a 2.4% increase in April, matching the rise observed in March and meeting analysts’ forecasts. On a monthly basis, both the overall PPI and the core PPI climbed by 0.5% in April compared to the previous month.
USD: U.S. PPI Up 0.5% in April
In April, the US Producer Price Index (PPI) recorded a year-on-year (YoY) increase of 2.2%, marking a notable uptick from the 1.8% figure reported in March. Additionally, the Core Producer Price Index, which excludes volatile food and energy prices, registered a YoY increase of 2.4% for April.
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On a monthly basis, both the Core PPI and the regular PPI saw a 0.50% increase, signaling sustained inflationary pressures across the board. These figures suggest that price increases in both core and non-core sectors are contributing to the overall uptick in wholesale prices.
The release of this data had an impact on currency markets, prompting the US Dollar to strengthen against its counterparts. This movement reflects market reactions to the inflationary data and its potential implications for monetary policy and economic conditions moving forward.
The latest data from the US Bureau of Labor Statistics revealed that US producer prices experienced a more significant increase in April than initially anticipated, indicating that inflationary pressures may persist for a while longer. The Producer Price Index (PPI) for final demand surged by 0.5% compared to the previous month, following a downwardly revised 0.1% decline in March.
This rise in wholesale prices, as indicated by the PPI, underscores the ongoing challenges in addressing inflationary trends. On a year-over-year basis, the PPI saw a notable increase of 2.2% compared to the same period last year. These findings suggest that inflationary pressures remain a prominent factor in the economic landscape, requiring continued attention and monitoring.
USD: PPI Boosts Fed; S&P 500 Futures Steady Pre-CPI
In April, the US Producer Price Index (PPI) saw a year-on-year increase of 2.2%, up from March’s 1.8%. The Core PPI for April also rose, reaching 2.4% year-on-year. Both Core and Regular PPI showed a 0.50% increase on a monthly basis.
The release of this data prompted a strengthening of the US Dollar against other currencies in trading today, reflecting market reactions to the inflationary trends highlighted in the report.
The latest data on the Producer Price Index (PPI), released on Tuesday, indicated a notable uptick in inflation during April. However, downward revisions to previous data helped alleviate some concerns. Notably, healthcare prices, a significant component of the Federal Reserve’s core inflation rate, showed a slight moderation.
Following the PPI release, S&P 500 futures remained largely unchanged as investors awaited key reports on Wednesday, including the Consumer Price Index (CPI) and retail sales figures.
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PPI Data Overview:
The PPI for final demand increased by 0.5% month-on-month and by 2.2% year-on-year. Economists on Wall Street had anticipated a 0.2% monthly rise and a 2.2% gain year-on-year. However, the monthly increase exceeded expectations, while the annual increase remained in line with forecasts. Notably, March’s headline PPI was revised downward from 0.2% to -0.1%.
Excluding food and energy, the PPI rose by 0.3% month-on-month, surpassing the forecast of 0.2%. However, similar to the headline figure, March’s data was revised downward from 0.2% to -0.1%.
Impact on Key Fed Inflation Rate:
The PPI data showed that healthcare services prices increased by 0.266% month-on-month, contributing to a 12-month healthcare services inflation rate of 2.9%, down from the initially reported 3.1% in March. These healthcare data points are crucial inputs for the Personal Consumption Expenditures (PCE) price index, which the Fed utilizes to assess inflation against its 2% target.
Airline passenger services prices, another component of the PCE price index, declined by 3.8% in April, providing further positive news for the Fed’s inflation rate. However, portfolio management fees unexpectedly rose by 3.9% in April, a trend that typically aligns with stock market fluctuations.
Consumer Price Index (CPI) Preview:
Looking ahead, the Consumer Price Index (CPI) data for April is expected to show a 0.3% monthly increase, which would lower the 12-month headline inflation rate to 3.4%. The core CPI, excluding food and energy, is projected to rise by 0.3%, moderating slightly compared to previous months. Ian Shepherdson, chief economist at Pantheon Macroeconomics, anticipates a 0.35% rise for the core CPI.
Fed Rate-Cut Odds:
Prior to the PPI release, market expectations indicated a 31% chance of a quarter-point rate cut by the Fed’s July 31 meeting and a 64% chance by the September 18 meeting. Shepherdson suggests that the Fed would likely need to see consistently low CPI prints before proceeding with a rate cut, emphasizing that significant downside surprises would be required to shift rate-cut probabilities substantially.
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