Wholesale Prices Increase for First Time in Three Months
U.S. wholesale prices rose in April for the first time in three months, buoyed by firmer costs for portfolio management services.
The 0.2% gain in the producer-price index last month followed a 0.1% decline in March, Labor Department figures showed May 13. The median forecast of economists surveyed by Bloomberg News called for a 0.3% advance. Wholesale prices were little changed from April 2015.
A weaker dollar since the start of the year and a rebound in oil and industrial metals is helping to put a floor under inflation. Also, price pressures probably will be slow to evolve after demand cooled in the first quarter, affording Federal Reserve policymakers some time before considering another rate increase.
“The message is that some of the rebound in energy prices is beginning to filter through the price pipeline,” Millan Mulraine, deputy head of U.S. research and strategy for TD Securities USA, said before the report. The data point to “a bit of a pickup in underlying inflation momentum.”
Estimates in the Bloomberg survey of economists ranged from advances of 0.1% to 0.5%.
The pickup in April was spurred by a 4.5% jump in the cost of portfolio management, the biggest advance since October 2013.
Energy expenses, reflecting higher costs for gasoline and electricity, rose another 0.2% in April after a 1.8% surge the month before.
Food prices decreased for a third straight month, falling 0.3% in April on lower costs for eggs and vegetables.
Wholesale prices excluding these two components rose 0.1% in April from the month before, matching the median forecast of economists surveyed. It followed a 0.1% decrease in March. Those costs were up 0.9% from April 2015.
Also eliminating trade services to arrive at a reading some economists prefer because it excludes one of the report’s most volatile components, wholesale costs rose 0.3% in April from a month earlier after no change in March.
The report showed a 22.1% surge in the cost of carbon steel scrap, the biggest gain since April 2008. Prices of pharmaceuticals and light trucks also picked up.
Goods prices increased 0.2% in April, while final demand services were up 0.1%.
