U.S. ECONOMICS: April PPI Wrap
The 0.6% U.S. April PPI rise with a 0.5% core price increase blew past assumptions thanks to widespread gains that left 0.6% increases for both the goods and services components, with a particularly large 1.4% rise for trade services that doubled-down on the 1.4% March increase. We also saw a big 2.7% drought-led surge in food prices, alongside a restrained 0.1% rise for energy.
Food and energy prices ratcheted higher through this year's harsh winter, with only a modest energy price give-back into May but continued food price increases thanks to the West Coast drought.
We saw a choppy but sideways commodity price pattern in 2013, with restraint from a sluggish world economy that capped big gains earlier in the expansion.
For the commodity price specifics, the 0.6% April goods price rise followed a flat March figure but 0.4% gains in each of the prior three months.
The 2.7% April food price surge followed increases of 1.1% in March, 0.6% in February and 1.0% in January, though prior declines of 0.4% in December and 0.3% in November. Recent food price gains follow a downward 2013 price correction after the 2012 draught boost.