Wholesale Prices in U.S. Increase for First Time in Three Months

U.S. wholesale prices rose in April for the first time in three months, buoyed by firmer costs for portfolio management services.

The 0.2 percent gain in the producer-price index last month followed a 0.1 percent decline in March, Labor Department figures showed Friday. The median forecast of economists surveyed by Bloomberg called for a 0.3 percent advance. Wholesale prices were little changed from April 2015.

A weaker dollar since the start of the year and a rebound in oil and industrial metals is helping to put a floor under inflation. At the same, price pressures will probably be slow to evolve after demand cooled in the first quarter, affording Federal Reserve policy makers some time before considering another rate increase.

“The message is that some of the rebound in energy prices is beginning to filter through the price pipeline,” Millan Mulraine, deputy head of U.S. research and strategy for TD Securities USA LLC, said before the report. The data point to “a bit of a pickup in underlying inflation momentum.”

Estimates in the Bloomberg survey of economists ranged from advances of 0.1 percent to 0.5 percent.

The pickup in April was spurred by a 4.5 percent jump in the cost of portfolio management, the biggest advance since October 2013.

Energy Costs

Energy expenses, reflecting higher costs for gasoline and electricity, rose another 0.2 percent in April after a 1.8 percent surge the month before.

Food prices decreased for a third straight month, falling

0.3 percent in April on lower costs for eggs and vegetables.

Wholesale prices excluding these two components rose 0.1 percent in April from the month before, matching the median forecast of economists surveyed. It followed a 0.1 percent decrease in March. Those costs were up 0.9 percent from April

2015.

Also eliminating trade services to arrive at a reading some economists prefer because it excludes one of the report’s most volatile components, wholesale costs rose 0.3 percent in April from a month earlier after no change in March.

The report showed a 22.1 percent surge in the cost of carbon steel scrap, the biggest gain since April 2008. Prices of pharmaceuticals and light trucks also picked up.

Goods prices increased 0.2 percent in April, while final demand services were up 0.1 percent.

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