March PPI Keeps Pressure on the Fed

Sharply rising producer prices and an unexpected blip in factory activity are troublesome developments

Two U.S. economic reports released Apr. 15 worked against the current thrust of Federal Reserve policy. The producer price index (PPI) for March highlighted the alarming upward trajectory for U.S. prices, while the April Empire State index of manufacturing conditions reversed the negative readings of the prior two months. Both the headline reading and the mix of components in the Empire State index are inconsistent with the current recession expectations of Wall Street and Main Street.

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