US wholesale price spikes ease but remain at 11% in April

Record rates of inflation continue to hit American wallets

A worker walks past a wholesale market in Washington. AFP
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Inflation pressures at the wholesale level receded somewhat in April, easing back from the March record partly due to a retreat in US prices for petrol and vegetables, government data released on Thursday showed.

The producer price index (PPI) rose only 0.5 per cent compared to March, far slower than the prior two months, the Labour Department reported.

But wholesale inflation was 11 per cent in the 12 months that ended in April, only slightly below the record high of 11.2 per cent seen in March, the report stated.

And the data showed signs of price pressures continuing to build.

After the retreat in consumer prices reported on Wednesday, economists said surging US inflation, spurred by the war in Ukraine and its impact on energy and food prices, may have peaked in March.

But Mahir Rasheed of Oxford Economics was more cautious, saying that “price pressures remained high”.

“With demand remaining fairly buoyant and the supply side of the economy facing persistent supply-side headwinds, it may be too early to celebrate,” he said in an analysis.

Prices have been accelerating for months as the US economy recovered from the Covid-19 pandemic shutdowns and demand outstripped supply, but restrictions in China have raised concerns that the global supply snarls may worsen.

PPI for petrol fell 3.2 per cent last month, while prices for cars and jet fuel increased, with the cost of eggs soaring 82 per cent in the month, the Labour Department report said.

Stripping out volatile items such as food and energy, PPI rose 0.6 per cent in the month and 6.9 per cent over the year.

Prices for intermediate goods, which indicates inflation pressures in the pipeline, were up sharply, the data showed.

Updated: May 12, 2022, 5:27 PM