May 14 (UPI) — The Labor Department said on Tuesday that wholesale prices in April jumped to 2024 highs, essentially dashing any hope for an interest rate cut by the Federal Reserve.
The producer price index increased a seasonally adjusted 0.5% in April and 2.2% from the same month last year, with the yearly boost marking the largest hike for the index so far in 2024.
The monthly jump exceeded Dow Jones estimates of a 0.3% rise.
Core PPI, which removes volatile food and energy prices, also rose 0.5% with a 0.4% rise with trade services also stripped out, both which exceeded Dow Jones estimates of 0.2%.
“Nearly three-quarters of the April advance in final demand prices is attributed to a 0.6% increase in the index for final demand services,” the Labor Department said. “Prices for final demand goods up 0.4%.”
Chris Larkin, managing director of trading and investing for E-Trade from Morgan Stanley, told CNBC that observers may not want to overstate the inflation trend bump.
“Sticky inflation looked downright stuck this morning after a much hotter-than-expected inflation reading,” Larkin said. “But with last month’s numbers revised lower, this report may not have been as much of an upside shock as it first appeared to be.”
The Labor Department said final demand services less trade services, transportation and warehousing were 0.6%. Trade services drove the increase, growing 0.8% while transportation and warehousing services decreased 0.6%.
“A 3.9% advance in the index for portfolio management was a major factor in the April increase in prices for final demand services,” the Labor Department said. “The indexes for machinery and equipment wholesaling, residential real estate services (partial), automobiles retailing (partial), guestroom rental and truck transportation of freight also moved higher.”