FILE - Rubila Clemente waters green onions, on April 19, 2024, at Christopher Farm in Modoc, Ind. On Tuesday, May 14, 2024, the Labor Department releases producer prices data for April. (AP Photo/Joshua A. Bickel)
WASHINGTON (AP) – U.S. wholesale prices rose sharply last month, a sign that stubbornly high inflation may persist after three elevated readings in consumer prices to start the year.
The Labor Department said Tuesday that its producer price index – which tracks price changes before they reach consumers – climbed 0.5% from March to April, after it dipped 0.1% the previous month. Measured year over year, producer prices rose by 2.2% in April, up from 1.8% in March and the biggest increase in a year.
A measure of underlying inflation, which excludes the volatile food and energy categories, also jumped 0.5% from March to April. Economists closely watch core prices because they provide a better signal of where inflation is headed than the overall figure.
Tuesday’s modest readings may raise concerns on Wall Street, at the Biden White House and for inflation-fighters at the Federal Reserve. Last week Fed officials underscored that they were prepared to leave their key interest rate at 5.3%, the highest in 23 years, as long as needed to bring inflation back to its 2% target. Inflation has fallen steadily since late 2022 but stalled at an elevated level in the first three months of this year.
As recently as March, Fed officials had forecast they would reduce their key rate three times this year. But in their most recent comments, most suggest they could cut once or twice this year, or maybe not at all.
