Gina Bolvin, president of Bolvin Wealth Management Group, discusses commodity movements, expected inflation data, the housing industry and the outlook for consumers.
Wholesale-level inflation is much higher than expected in April, the latest sign that price pressures in the economy remain high and difficult to contain.
The Labor Department announced Tuesday that it will measure the producer price index. Inflation at the wholesale level In April, until it reached consumers, it rose 0.5% from the previous month. On an annual basis, prices continued to rise by 2.2%, the highest level since April 2023.
While the monthly growth was significantly higher than the 0.3% increase expected by LSEG economists, the headline number is in line with expectations.
High inflation costs Americans an extra $1,000 a month.
In another sign of the persistence of high inflation, core prices, which exclude the more volatile indicators of food and energy, rose 0.5% in the month. This is higher than both the 0.2% expected and the growth recorded in the previous month.
On a 12-month basis, sales increased by 2.4%, in line with expectations.
“Inflation looked like a complete deadlock this morning following the release of much higher than expected inflation,” said Chris Larkin, managing director of trading and investments at E*TRADE. “However, last month’s numbers have been revised downward, so this report may not have been as much of an upside shock as initially thought.”
Why are groceries still so expensive?
caused by high inflation severe financial pressure Most American households are being forced to pay more for necessities like rent, groceries, and gasoline. For low-income Americans, rising prices are especially devastating. That’s because they tend to spend more of their already stretched salaries on necessities, and therefore have less flexibility to save money.
An employee arranges produce at a Costco store in Teterboro, New Jersey, on February 28. (Stephanie Keith/Bloomberg via Getty Images/Getty Images)
The data was released one day before the Labor Department released data that it is monitoring more closely. consumer price index (CPI), which measures the price paid directly by consumers.The report predicts that inflation will rise by 0.4% In April, it increased by 3.4% compared to the previous month, and by 3.4% compared to the same month last year.
Both announcements are considered important indicators of inflation, and PPI is considered a leading indicator of inflationary pressures as costs are passed on to consumers.
Various gauges show that it is still above the rate of inflation. federal reserve Desirable 2% target.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| Me: DJI | Dow Jones Average | 39431.51 | -81.33 | -0.21% |
| I: Comp | Nasdaq Composite Index | 16388.237764 | +47.37 | +0.29% |
| SP500 | S&P500 | 5221.42 | -1.26 | -0.02% |
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The Fed signaled it was closely monitoring this week’s inflation report after rising price increases in the first quarter of this year forced policymakers to keep interest rates on hold at 23-year highs. .
Central bank officials have said they expect to cut interest rates this year, but have signaled they won’t do so until they are confident inflation has been overcome.
“If the CPI also exceeds expectations, that could cast doubt on the interest rate situation,” Larkin said. “In late 2023, some investors thought the Fed would start cutting rates in March and would cut rates six to seven times by the end of this year. There is likely to be more debate about whether this includes at least one rate cut.” ”
Stock futures fell in early trading after the better-than-expected data.
