Inflation in wholesale prices remains at record highs, suggesting that household inflation is becoming more painful.

US wholesale prices fell in April, but remain close to record highs in March, and rising producer prices tend to be passed on to end consumers, so short-term for US households. It suggests that there is little rest in inflation.

According to the Bureau of Labor Statistics, the Producer Price Index (PPI), which tracks inflation before it hits consumers, rose 11.0% annually in April. Said on wednesday.. This is a slight slowdown from the 11.5 percent pace of March’s revised producer price inflation, which was the highest in the history of the data series dating back to 2010.

Monthly data show that the pace of wholesale prices has slowed significantly, with PPI rising 0.5% from March to April, more than three times slower than last month’s 1.6%. The decline in monthly PPI data suggests that the pace of wholesale inflation may have peaked.

Further evidence of easing wholesale price inflationary pressures comes in the form of so-called core PPI data. It removes the unstable categories of food and energy and is considered by economists to be a more accurate measure of the underlying price pressure.

Core PPI dropped to 8.8% annually in April after hitting 9.6% in March, but was 0.4% month-on-month last month, one-third of the 1.2% pace last month.

The headline pace of annual wholesale price inflation was slower than expected by economists, but monthly headline PPI numbers were in line with expectations. Monthly and annual core PPIs exceeded expectations.

As wholesale price movements lag behind consumer inflation, Thursday’s data suggest that household inflation is becoming more painful before prices ease.

Peak inflation?

Consumer price index growth is modest at an annual pace in April, compared to the 8.5% peak in March, as reflected in Headline Consumer Price Index (CPI) data released Wednesday. It showed a slow rise at a pace of 8.3%.

However, the core consumer price index has accelerated both year-over-year and on a monthly basis. In particular, monthly core inflation was twice the 0.3% pace notched in March.

Greg McBride, chief financial analyst at Bankrate, told The Epoch Times in an email that inflation is expected to be more widespread, and that the decline in headline CPI data has peaked and is now beginning to decline. I warned you not to interpret it as meaning.

“Prices are rising slowly, but not as much as we expected. The rise is still widespread, except for the currently seemingly outdated decline in energy prices,” McBride said. “It’s tempting to say that we’ve seen a peak as the annual rate has dropped from 8.5% to 8.3%, but as in August last year, we’ve been bothered before.”

Inflation has permeated more categories and has become a broader phenomenon, not only has potential consumer price pressure increased in April, despite a slight relaxation in headline readings. ..

“Look at the composition of inflation. This suggests that there are many drivers now. This is no longer just a problem with the Ukrainian war, but a broader inflation process that the Fed is significantly behind. “Mohamed Ellerian, Chief Economic Advisor of Allianz, said in an interview with the CNBC.

El-Erian added that inflation in the United States will inevitably turn into a cost-of-living crisis as price pressures increase, further erode wage increases in many US households and put pressure on demand.

“At that time, the inflation problem is also a growth problem. Why? Affordable. High prices destroy demand,” the economist replied.

“It’s only a matter of time before we talk about the cost of living crisis, and that’s it,” he added.

Tom Ojimek


Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communication, and adult education. The best writing advice he has ever heard is from Roy Peter Clark.