Producer prices in the US rose more than expected in April following strong increases in the cost of services and goods, suggesting that inflation remained high at the start of the second quarter.
The producer price index for final demand rose 0.5% last month after falling by a revised 0.1% in March, the Labor Department's Bureau of Labor Statistics said on Tuesday.
Economists polled by Reuters had forecast PPI rising 0.3% after a previously reported increase of 0.2% in March. In the 12 months to April, PPI rose 2.2% after rising 1.8% in March.
Inflation rose in the first quarter on strong domestic demand after slowing for much of the past year. Economists are optimistic that prices will return to a downward trend this quarter as the labor market slows.
Financial markets expect the Federal Reserve to begin an easing cycle in September, although some economists believe the first interest rate cut could happen in July.
The US central bank earlier this month left its benchmark overnight interest rate unchanged in the current 5.25%-5.50% range, where it has been since July. The Fed has raised its policy rate by 525 basis points since March 2022.
Consumer price data on Wednesday could offer new clues about the timing of the expected rate cut.
