Producer prices were a bit higher than expected today but negative revisions take that away. Importantly, prices appear to have bottomed. 
The BLS reports the month-over-month PPI for April was 0.5 percent vs the Bloomberg Econoday consensus o 0.3 percent.
However, the BLS revised March from +0.2 to -0.1 so the year-over-year Econoday expectation was right on the mark at 2.2 percent.
PPI Details
- The Producer Price Index for final demand rose 0.5 percent in April.
- Final demand prices declined 0.1 percent in March and advanced 0.6 percent in February.
- On an unadjusted basis, the index for final demand moved up 2.2 percent for the 12 months ended in April, the largest increase since rising 2.3 percent for the 12 months ended April 2023.
- Nearly three-quarters of the April advance in final demand prices is attributable to a 0.6-percent increase in the index for final demand services.
- Prices for final demand goods moved up 0.4 percent. The index for final demand less foods, energy, and trade services moved up 0.4 percent in April after rising 0.2 percent in March.
- For the 12 months ended in April, prices for final demand less foods, energy, and trade services increased 3.1 percent, the largest advance since climbing 3.4 percent for the 12 months ended April 2023.
Spotlight Services
Services have a bigger weight in the overall PPI than goods and they are rising steeper. Goods are influenced heavily by food and energy, both quite volatile.
PPI Final Demand Year-Over-Year Four Ways
PPI Year-Over-Year Details
- Final Demand: 2.2%
- Final Demand Goods: 1.3%
- Final Demand Services: 2.7%
- Final Demand Food: 0.5%
- Final Demand Less Food and Energy: 2.4%
For now, food is holding down the PPI. How much longer that remains is unknowable. But the key takeaway is the strength in services. If that filters through to the CPI, the Fed will have some difficulty unless rents turn lower.
I discussed rent twice recently. Please see Rent Prices Rose for the Third Straight Month According to Apartment List
Also see Quotes of the Day on Rent Inflation By the Fed and Property Managers
The Apartment List assessment is incorrect, as discussed. The BLS has rents up 0.4 percent for 31 consecutive months.
We find out the April CPI tomorrow.
Mainstream media and admin state (or establishment) going to do whatever it takes to report there is no recession before the upcoming election this November.
https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Faab5fda5-69a5-4853-a0f3-bde10ecf8772_550x181.png
Precarious: One Misfortune Away from Insolvency
As a result, a significant percentage of households that are considered middle-class are one misfortune away from insolvency.
https://charleshughsmith.substack.com/p/precarious-one-misfortune-away-from
Central economic planning strikes again
Eh, this one looked much ado, deflationary even. What’s left, shelter and insurance? Food price had a nice drop. Most the services increase was investment services – maybe higher stock prices led to higher fees, trading volumes?
Inflation is Red Lobster losing $500,000,000 selling a shrimp meal for $20.
weat has made a nice move this past month
I don’t beleive the revisions THe economic politburo is spewing statistical garbage to blow smoke up or ass. Nobody with a brain believes this crap. They will delete anything that goes up in price in order to underreport true inflation rate. Recently delelted coffee. Pretty soon food prices will only be applied to dog or cat food.
Yet, the bond market is not selling off and risk on is increasing.
With the negative revisions to March, prices actually went down by 0.1%, the PPI was exactly in line with expectations.
10 Year Treasury was around 3.9% at start of 2024 and is now at 4.44%. Its around where it was between 1998 to 2007.
Its as if the 10 Year Treasury is priced to annual inflation stalled at 3%.
From what I remember, most economists see the 10 Year Treasury around 3% to 3.5% if annual inflation steadies at 2%.
All those new tariffs aren’t going to help get inflation down.
Jerry says the economy is great! Sounds better than a house with free porridge! Dont think the WH is going to be too happy that he said people see high prices which are not coming down and really care about economic calculations and data manipulation, they care about how expensive it is now to get by. Whoops.
“DON’T really care”
More good news. Just keeps coming