Tabasco hot PPI

April PPI jumped by 1.4% m/o/m headline, about 3 times what was expected (.5%), while the core was higher by 1% m/o/m, also well above the estimate of up .3%. Both follows gains of .7% and .2% for each in the month before (revised up from .5% and .1%). This brings the y/o/y gain to 6% and a core rate of 5.2%.

Not surprisingly, the nearly 16% rise in gasoline prices drove the rise in goods prices, followed by jet fuel, diesel fuel, fresh & dry vegetables, and industrial chemicals. Taking out food and energy saw a .7% m/o/m increase and by 4.6% y/o/y so this is more than just fuel and food prices.

With respect to services, prices were up 1.2% in the month and by 5.5% y/o/y. The BLS said “A major factor in the April advance in prices for final demand services was a 3.5% increase in margins for machinery and equipment wholesaling.” Also higher, truck transportation prices (spiked by 8.1% in April, something I’ve mentioned many times after hearing from trucking companies), fuels & lubricants retailing, health/beauty/optical goods retailing, chemicals products wholesaling and legal services. In contrast, portfolio mgmt prices fell 2.4%.