Preview: Due May 14 - U.S. April PPI - New Year strength fading
We expect a 0.3% increase in April’s PPI, with gains of 0.2% in the core rates ex food and energy and ex food, energy and trade. The core rates would match March’s outcome which slowed from above trend gains in January and February.
The New Year is often a time for price increases with January’s at 0.5% ex food and energy and 0.6% ex food, energy and trade particularly strong, before February followed with gains of 0.3% in both series. Two straight gains of 0.2% will still outpace the final five months of 2023 ex food and energy, though would be more consistent with ex food, energy and trade data for those months.
We expect goods PPI to rise by 0.6% but by only 0.1% ex food and energy. Energy is likely to see a lift from higher gasoline prices though this will be restrained by seasonal adjustments. Recent intermediate PPI data suggests food is likely to see a moderate rise too though the lift to the headline PPI will be modest. We expect a 0.2% rise in services, slowing from two straight gains of 0.3%.
Our forecast would see yr/yr growth edge up to 2.2% from 2.1% overall, reaching its highest since April 2023, but slow to 2.3% from 2.4% ex food and energy. Ex food, energy and trade the yr/yr pace would rise to 2.9% from 2.8%, to its highest since September 2023.