Inflation rose to 2.2% in producer price index in April in bad news for the Fed
By
Zachary Halaschak
May 14, 2024 8:33 am
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Inflation, as measured by the producer price index, rose to 2.2% for the year ending in April, the Bureau of Economic Analysis reported on Tuesday.
April marks the third straight rise in the headline inflation rate, the opposite of the trend sought by the Federal Reserve and a warning sign for President Joe Biden.
Most economists had forecast annual inflation would tick up by this much, so the reading was in line with expectations.
On a month-to-month basis, the price index increased by 0.5%, more than expected.
The Fed has raised its interest rate target to 5.25% to 5.50%, the highest since the dot-com bubble at the turn of the century.
Recent inflation reports have come in hotter than anticipated, with the consumer price index rising to 3.5% in March. Because of the hotter inflation prints, coupled with the insulation of the strong jobs market, many investors began to expect that the Fed would hold off on cutting rates until after the November election.
The labor market has remained above water despite the interest rate increases.
But the most recent jobs report showed some signs of slowing down.
The economy added 175,000 jobs in April versus 315,000 the month before, and the unemployment rate rose a tenth of a percentage point to 3.9%.
Additionally, the number of new applications for unemployment benefits rose by 22,000 to 231,000 last week, the highest number of jobless claims in about nine months.
The most recent data show job openings fell 3.7% in March to just under 8.5 million, the lowest level of openings since February 2021. The job opening numbers fell below expectations, continuing a trend of slowly declining job openings over the past few years.
more
https://www.washingtonexaminer.com/policy/finance-and-economy/3002557/inflation-rose-to-2-2-in-producer-price-index-in-april-in-bad-news-for-the-fed/
