U.S. producer prices just posted their biggest annual jump since 2022, as the energy shock from the Strait of Hormuz continues to ripple through the inflation pipeline. The headline Producer Price Index surged to 6% year-over-year in April, up from an upwardly revised 4.3% in March, the Bureau of Labor Statistics reported Wednesday. Economists had expected only 4.9%.
On a monthly basis, wholesale prices rocketed 1.4%—far above both the prior month's 0.7% and the 0.5% consensus estimate. Strip out food and energy, and core PPI accelerated from a revised 4% to 5.2%, again topping the 4.3% forecast. That's the hottest annual core reading since December 2022. Month-over-month core pressures rose 1%, accelerating from the prior 1% against a 0.3% consensus.
This hot PPI print follows Tuesday's higher-than-expected Consumer Price Index reading of 3.8%, and it reinforces fears that the Federal Reserve may need to keep tightening. Ahead of the release, Fed interest-rate futures had already priced in nearly a 50% chance of a rate hike by December 2026. Those odds are likely to climb.
This is a developing story…
