A report released by the Labor Department on Wednesday showed a modest uptick in U.S. producer prices in the month of April.
The Labor Department said its producer price index for final demand inched up by 0.1 percent in April after rising by 0.3 percent in March. Economists had expected prices to edge up by 0.2 percent.
The modest increase in producer prices was primarily due to continued growth in prices for final demand services, which crept up by 0.1 percent in April following a 0.3 percent increase in March.
The index for final demand trade services rose by 0.2 percent and the index for final demand transportation and warehousing services climbed by 0.6 percent, while the index for final demand services less trade, transportation, and warehousing services edged down by 0.1 percent.
Excluding food and energy prices, core producer prices rose by 0.2 percent in April after climbing by 0.3 percent in the previous month. The increase in core prices matched economist estimates.
Compared to the same month a year ago, producer prices were up by 2.6 percent in April, reflecting a deceleration from the 3.0 percent jump in March.
Core producer prices were up by 2.3 percent year-over-year in April compared to the 2.7 percent increase in the previous month.
Andrew Hunter, U.S. Economist at Capital Economics, said the slowdown in the annual rate of price growth suggests that the earlier surge in cost pressures at the beginning of the pipeline may be starting to ease.
“That said, the details of the report remain consistent with consumer price inflation trending higher, and we continue to expect the Fed to tighten policy more aggressively over the coming quarters,” Hunter said.
On Thursday, the Labor Department is scheduled to release a separate report on consumer price inflation in the month of April.
Consumer prices are expected to climb by 0.3 percent, while core consumer prices are expected to edge up by 0.2 percent.