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Producer Price Pressures Driving Inflation in the US

#PPI #prices #inflation #MSI


Inflation looks to be not so transitory“– Paul Ebeling

Prices paid to US producers rose in April by more than forecast, adding to signs of a growing wave of inflation pressure that’s extending to American consumers.

The PPI for final demand increased 0.6% from the prior month after a 1% gainer in March, according to data from the US Labor Department Thursday.

Excluding volatile food and fuel components, the core PPI advanced 0.7%.

A survey of economists called for a 0.3% monthly gainer in the overall measure and a 0.4% rise in the core figure. The April advance was broad across both goods and services.

The annual advance in the overall PPI accelerated to a 6.2% gainer, a number biased higher by the fact that it was compared to the very low reading seen in April 2020. The increase was the largest since Y 2010.

Production costs continue to climb stoking the flames of an already heated debate about the path and durability of inflation that the Fed views as temporary.

The PPI tracks changes in production costs, and supply bottlenecks and shortages tied to the pandemic recovery have caused commodity prices to soar. At the same time, labor costs have begun picking up. Together, the increases represent a threat to profit margins unless companies pass along the higher costs and boost productivity.

Fed official continue to say price pressures from pent-up demand and crimped supply chains will likely prove temporary, but many economists expect the uptick in inflation to be more lasting.

A separate Labor Department report Thursday showed applications for regular state unemployment benefits declined for a 2nd week, to a new VirusCasedemic low. A number of states recently announced intentions to stop federal virus relief programs prior to their 1 September expiry.

Thursday, the benchmark US stock market indexes finished at: DJIA +433.79 at 34021.45, NAS Comp +93.31 at 13125.02, S&P 500 +49.46 at 4112.5, the Russell 2000 (+1.7%) outperformed 

Volume: Trade on the NYSE came in at 1.0-B/shares exchanged

HeffX-LTN’s overall technical outlook for the major US stock market indexes is Bullish to Very Bullish in here.

Looking Ahead: Key reports Friday include Retail Sales for April, Industrial Production and Capacity Utilization for April, and the preliminary University of Michigan Index of Consumer Sentiment for May.

Have a healthy day, Keep the Faith!

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Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.