U.S. headline producer prices rise in April on energy costs

U.S. producer prices rose in April on increase in energy costs. Sequentially, producer prices rose 0.2 percent, due to higher energy prices and also transportation and core services. The “core-core” PPI, which excludes food, energy and trade services, rose 0.4 percent.

The headline producer prices and core rate both rose 2.2 percent on a year-on-year basis. Input costs for services and processed goods rose but imply pipeline prices continue to be moderate.

While most of the inputs for the monthly PCE deflator come from the consumer price inflation’s report, a few key inputs come from the PPI. Healthcare services prices recovered 0.3 percent after falling 0.2 percent in March. Airline fares rose 3.6 percent. Meanwhile, portfolio management services have rebounded totally.

“The upshot is that the Fed’s preferred inflation gauge is set to turnaround”, said Wells Fargo in a research report.

At 14:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at -34.0871 more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex