The Producer Price Index (PPI) fell 0.5% in April, defying expectations of a 0.2% increase, according to data released by the Bureau of Labor Statistics, driven by the biggest drop in services since 2009. This follows a revised flat reading in March (-0.4% previously reported) and translates to an annual gain of 2.4%, below the consensus of 2.5% and significantly lower than the prior 3.4% (revised from 3.2%).Â
Excluding volatile food and energy components, core PPI declined 0.4% month-over-month, contrasting with expectations for a 0.3% rise and the prior 0.4% increase (revised from -0.1%). On a year-over-year basis, core PPI slowed to 3.1%, down from a revised 4% in March (previously reported as 3.3%), aligning with analyst projections of 3.1%.Â
April’s decline in the purchasing price index offers reassurance to those concerned about potential tariff-driven cost increases. This sharper-than-anticipated drop suggests potential relief in upstream pricing pressures, which could influence broader inflation trends and the Federal Reserve’s policy outlook.Â
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