WASHINGTON May 14 U.S. producer prices posted
their largest increase in 1-1/2 years in April as the cost of
food and trade services surged, hinting at some inflation
pressures at the factory gate.
The Labor Department said on Wednesday its seasonally
adjusted producer price index for final demand rose 0.6 percent,
the biggest gain since September 2012. Producer prices increased
0.5 percent in March.
Economists polled by Reuters had forecast prices received by
the nation's farms, factories and refineries rising 0.2 percent.
In the 12 months through April, producer prices advanced 2.1
percent, the biggest gain since March 2012, after rising 1.4
percent in March.
Producer prices have been volatile in recent months, driven
by swings in the trade services category. The PPI series was
revamped at the start of the year to include services and
Its short history and volatility makes it a bit difficult to
discern a trend. While price pressures are creeping up at the
factory gate, the overall inflation backdrop remains benign
given the slack left over from the recession.
Last month, food prices surged 2.7 percent, the biggest rise
since February 2011. That followed a 1.1 percent increase in
March and marked the fourth consecutive month of gains in food
A drought in California is putting upward pressure on food
prices, leaving Americans confronting higher prices at the
Food prices were pushed up by a surge in the cost of meats,
which recorded their largest rise since October 2003.
Energy prices rose 0.1 percent last month. Services for
final demand gained 0.6 percent after rising 0.7 percent in
Producer prices excluding volatile food and energy costs
increased 0.5 percent in April after the prior month's 0.6
Another gauge of core producer prices - final demand less
foods, energy, and trade services - increased 0.3 percent after
rising by the same margin in March.
In the 12 months through April, core PPI for final demand
rose 1.9 percent after increasing 1.4 percent in March.
(Reporting By Lucia Mutikani; Editing by Andrea Ricci)