The Bureau of Labor Statistics (BLS) reported Thursday that wholesale inflation continued to fall in April.
The producer price index (PPI), a measure of the prices that companies get for finished goods in the marketplace, rose 0.2% after a 0.4% decline in March, BLS reported. However, three of the four supply-chain stages registered declining inflation year-over-year.
On an annual basis, the PPI rose 2.3% from April 2022, the lowest annual reading since January 2021.
“This morning’s PPI release indicates that prices are inching lower,” said Quincy Krosby, chief global strategist at LPL Financial, “a significant indicator for a market concerned about an elevated trend in prices paid.”
Supply-chain stages showed inflation retreating significantly. Two of the four stages registered their largest 12-month inflation decrease since 2020. Another stage showed its first 12-month decline since 2020.
Goods inputs for Stage 4 intermediate demand, measuring the products purchased by industries primarily producing output sold to final demand, such as RV manufacturers, fell 0.1% in April after falling 0.4% in March. Year-over-year Stage 4 demand rose 2.9%, down from a 3.2% increase in March.
Goods inputs for Stage 3 intermediate demand, measuring suppliers to Stage 4 producers such as RV manufacturers, fell 1.0% in April after a revised 0.9% decline in March. Goods inputs for Stage 3 demand have declined month-over-month for 10 consecutive months.
Overall, year-over-year Stage 3 demand fell 3.6%. The decline was the largest year-over-year decline since August 2020.
Goods inputs for Stage 2 intermediate demand, measuring suppliers to Stage 3 suppliers, rose 1.8% in April after a revised 4.4% decline in March. Overall, Stage 2 intermediate demand dropped 5.1% year-over-year, the largest year-over-year decline since July 2020.
Finally, goods inputs for Stage 1 demand fell 0.5% in April after a revised 0.9% decline in March. Overall, demand declined 0.8% year-over-year, the first 12-month decline since October 2020.
