Newly released federal pricing data shows producer prices fell unexpectedly last month.
The U.S. Bureau of Labor Statistics released new pricing data Thursday that showed the Producer Price Index fell 0.5% in April, defying economists’ expectations.
The price decrease comes despite concerns from economists that tariffs could lead to an increase in prices for American consumers. The annual inflation rate for producer prices fell to 2.4%.
“Among final demand goods in April, the index for general purpose machinery and equipment advanced 1.1%,” BLS said.
PPI is divided into two categories, goods and services.
“Prices for residential electric power, fresh and dry vegetables, non-electronic cigarettes, and utility natural gas also moved up. Conversely, the index for chicken eggs dropped 39.4%,” BLS added. “Prices for gasoline, gas fuels, diesel fuel, and primary basic organic chemicals also fell.”
Services saw the biggest drop since PPI data began being tracked in 2009.
“Over 40% of the April decline in the index for final demand services is attributable to margins for machinery and vehicle wholesaling, which dropped 6.1%,” BLS said. “The indexes for portfolio management, food and alcohol wholesaling, system software publishing, traveler accommodation services, and airline passenger services also fell. Conversely, prices for outpatient care (partial) advanced 0.3%. The indexes for furniture retailing and for inpatient care also moved up.”
