WASHINGTON — U.S. wholesale prices rose sharply last month, a sign that persistently high inflation could persist after three consumer price highs to start the year.
The Labor Ministry said on Tuesday that the producer price index – which tracks price changes before they reach consumers – rose 0.5% from March to April after falling 0.1% the month before. Year-on-year, producer prices rose 2.2% in April, up from 1.8% in March and the largest increase in a year.
A measure of underlying inflation, which excludes volatile food and energy categories, also rose 0.5% from March to April. Economists keep a close eye on core prices because they provide a better signal of where inflation is headed than the headline figure.
Tuesday’s modest figures could raise concerns on Wall Street, in the Biden White House and among inflation fighters at the Federal Reserve. Last week, Fed officials underscored their willingness to leave their key interest rate at 5.3%, the highest in 23 years, for as long as it takes to return inflation to the 2% target. Inflation has fallen steadily since the end of 2022, but remained at high levels in the first three months of this year.
As recently as March, Fed officials had predicted they would cut their key interest rate three times this year. But in their most recent comments, most suggest they could make one or two cuts this year, or perhaps not at all.