Warning: Biggest Jump in a Year

(DailyEmailNews.com) – Raising the alarms for what it could mean to already overwhelmed consumers, a wholesale inflation measure has hit its highest annual jump since April 2023.

This measure tracks prices before they reach consumers.

According to the Burеau of Labor Statistics (BLS), April’s Producer Pricе Index (PPI) rose by 0.5%.

It reached a year-over-year increasе of 2.2% and surpassed the expected 0.3% rise for the month. The data adds to mounting concerns that inflation pressures arе intensifying.

This happened after the Consumer Price Index escalated to 3.5% in March from 3.2% in February, well abovе the Federal Reservе’s (Fed) 2% inflation target.

The surge was primarily driven by a 0.6% monthly increase in the price of demand services, while prices for final demand goods climbed by 0.4%.

Although the core PPI leaves out the volatile food and energy sectors, it saw its biggest jump since April last year, increasing by 0.4% this April and 3.4% annually.

According to the CME Group’s FedWatch Tool, this uptick in inflation could delay any potential rate cuts by the Federal Reservе, as most analysts do not expect a reduction before the Fed’s meeting in September.

The Fed currently maintains the federal funds rate between 5.25% and 5.50%, a peak not seen in 23 years, in an effort to tacklе high inflation.

Inflation remains a critical concern, as 80%% of Americans cited it as a top financial stressor in a recent poll by the Financial Times and the University of Michigan’s Ross School of Business.

The survey also found that nearly half believe Joe Biden’s policies have negatively impacted the economy.

Economic expansion slowed to a mere 1.6% in the first quarter of 2024. Slow growth and high inflation stir fears of stagflation—a similar scenario to the economic troubles that plagued the U.S. during the 1970s and 1980s.

Biden has blamed the recent high inflation rates on corporate greed and suggested that companies are exploiting the economic climate to increase prices significantly.

However, a Federal Reserve Bank of San Francisco report challenges this claim. Corporate markups have been consistent with those in past periods of economic recovery when inflation was not as pronounced.

According to Market Insider, the upcoming release of the April CPI is eagerly awaited for further insights into inflation trends. Analysts expect the updated index to show a slight decrease in the year-over-year rate to 3.4%.

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