ANI
12 May 2022, 23:25 GMT+10
Washington [US], May 12 (ANI/Sputnik): US producer prices, a measure of what retailers pay for goods at the wholesale level, rose 11 per cent in the year to April, the Labor Department said on Thursday in the latest data that showed little let-up in inflation pressure.
"On an unadjusted basis, final demand prices moved up 11 per cent for the 12 months ended in April," the Bureau of Labor Statistics, a unit within the Labor Department, said in its monthly reading of the Producer Price Index, or PPI.
The data comes on the heels of Wednesday's reading of the Consumer Price Index, or CPI, from the Labor Department that showed an annual 8.3 per cent growth for April versus the 8.5 per cent rise in the 12 months to March.
Economists had predicted annual growth of 10.7 per cent for the PPI and 8.1 per cent for the CPI in April, just below what was reported.
"These numbers ... indicate no let-up in pipeline inflation pressures in April," economist Adam Button said in a post on the ForexLive forum. "What worries me is that producers and buyers are starting to get accustomed to having to accept and pass on price increases. That's the kind of thing that the Fed wants to avoid."The central bank has been closely watching inflation numbers that have been trending at four-decade highs since late last year as the US economy expanded from the coronavirus pandemic.
After contracting 3.5 per cent in 2020 from disruptions forced by the pandemic, the economy expanded by 5.7 per cent in 2021, growing at its quickest pace since 1982.
But inflation grew even faster. The Personal Consumption Expenditure Index, or PCE, which is followed by the Fed, rose by 5.8 per cent in the year to December and 6.6 per cent in the 12 months to March. Both readings also represented the fastest growth since the 1980s. The CPI's annual expansion matched 40-year highs as well.
The Federal Reserve's own tolerance for inflation is 2 per cent per year and is determined to bring the PPI, PCE and CPI readings back to benign levels.
To do this, officials at the central bank are debating the viability of a 75-basis point (bps) interest rate hike in June, after the 50-bps and 25-bps increases at their May and March meetings, respectively. A 75-bps hike would represent the largest upward adjustment in rates since 1994.
Federal Reserve Chairman Jerome Powell has also indicated that a total of seven rate hikes - the maximum allowable under the central bank's calendar of meetings this year - were on the slot for 2022 and more could follow in 2023 until a return to the annual 2% inflation rate is achieved. (ANI/Sputnik)Get a daily dose of Herald Globe news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
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