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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.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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