US April PPI Soars, Sets Fastest Growth Pace Since 2022

The U.S. Producer Price Index (PPI) for April was significantly higher than market expectations. PPI rose to 6% year-on-year, above the expected 4.8% and the previous value of 4%; core PPI rose to 5.2% year-on-year, also higher than the expected 4.3% and the previous value of 3.8%.

The PPI increased by 1.4% month-on-month in April, nearly three times the 0.5% expected; core PPI increased by 1% month-on-month, significantly higher than the expected 0.3%.

The core pressures that drove PPI higher came from energy and transportation costs. Due to the war driving up energy prices, businesses continue to face cost pressures, which may be passed on to downstream through prices for goods and services. Commodity prices, including fuel, saw the biggest increase since 2022, with energy costs rising by 7.8% in April; service costs rose by 1.2%, the largest increase in four years.

The release of PPI led to an increase in the U.S. 10-year Treasury yield by nearly two basis points to 4.49% , the highest level since July last year. Two-year U.S. Treasury yields rose by 1.5 basis points to 4.011%.

The U.S. dollar index continued to rise, increasing by 0.26% to 98.58. Spot gold prices slightly continued their downward trend, falling by 0.7% to $4,680.19 per ounce.