U.S. producer price inflation stayed mild in April despite strong economic growth and higher gasoline costs.
The producer-price index for finished goods rose 0.7% in April, the fastest clip in a year, the Labor Department said today. But the surge was mostly due to sharply higher energy prices.
The more closely watched “core” index, which excludes food and energy items, rose just 0.2%, the same rate as in March.
Economists had called for a 0.3% increase in the overall index and a 0.2% increase in the core. The report was consistent with other recent measures of inflation, which have shown prices rising slowly but steadily.
The Labor Department said in its report that overall producer prices could be “traced” to a surge in energy prices, which climbed 1.6% after 0.6% gain in March. Crude-oil prices recently hit new 13-year highs, reflecting strong global demand, tight supply and tensions in the Middle East.
Inflationary pressures grew in annual terms. In the 12 months that ended April, producer prices were up 3.7% — but still below the recent peak of 4% reached in December. The core index was up 1.5% in annual terms, marking the highest rate since the summer of 2001.
In a separate release, the Commerce Department reported that sales at U.S. retailers dropped by 0.5% in April, following a strong 2% rise in March.
Economists were forecasting a small 0.2% rise in sales.
April’s performance was bogged down by sharp 1.8% drop in automobile sales. But even without auto sales, overall retail sales still would have gone down by 0.1%.
Meanwhile, U.S. initial jobless claims rose by 13,000 to a seasonally adjusted level of 331,000 in the week that ended May 8, the Labor Department said today.
However, the four-week average dwindled to 335,750, the lowest level in three-and-a-half years.
The increase in initial claims was larger than Wall Street had been expecting. Economists had called for claims to rise by 10,000 to 325,000.
The Labor Department also revised its initial estimate for the week of April 24, raising it by 3,000 to 318,000.