April PPI

WASHINGTON (Thomson Financial) -

US inflation at the wholesale level rose slower than expected in April, while core inflation, which strips out volatile food and energy prices, rose twice as fast as expected, the Labor Department said today.

The department's Producer Price Index, which measures inflation pressures before they reach the consumer, rose 0.2 pct in April following a 1.1 increase in March.
Core inflation rose 0.4 pct for the month, after rising 0.2 pct in March. That left core inflation up 3.0 pct in the past twelve months, the largest change since December 1991. Overall inflation has risen an unadjusted 6.5 pct for the year.
Economists polled by Thomson's IFR Markets had expected overall wholesale inflation to rise 0.4 pct, while core inflation was expected to increase 0.2 pct.

The slower than expected overall inflation was due to falling energy prices and flat food prices, categories that boosted inflation in the previous month. Energy fell 0.2 pct, the largest drop since December, while food was unchanged in the month.
Within the energy sector, gasoline fell 4.6 pct, the largest drop since December. Home heating oil rose 5.4 pct and liquefied petroleum gas rose 3.5 pct. Residential electric power rose 1.2 pct, the largest increase since January 2006.
Although overall food prices were unchanged, the cost of milled rice rose 17.4 pct, the largest increase since November 1993. however that increase was offset by a 12.3 pct price decline in fresh eggs, the largest decline since June. The price of vegetables, beef and veal also fell in the month.