US PPI: Signals of stronger inflation pressures - Wells Fargo

Analysts from Wells Fargo, point out that led by a rebound in services prices, the PPI for final demand increased 0.5% in April. They warned that the report show signals of stronger inflation pressures at the start of the second quarter. 

Key Quotes: 

“Proving March’s modest decline was short-lived, PPI for final demand increased at a stronger-than-expected 0.5 percent in April. Price gains were broad based with solid increases in food (0.9 percent), energy (0.8 percent) and services (0.4 percent).”

“Ex-food, energy and trade services—our preferred measure of PPI—jumped 0.7 percent on the month and is rising at its fastest annual pace on record at 2.1 percent.”

“With gains broad based and annual rates in the headline and core measures standing at a series high, today’s PPI report signals stronger inflation pressures at the start of Q2 and also keeps the Fed on track for a June interest rate hike.”