Investing.com - Producer price inflation in the U.S. increased more than forecast in April, while core prices also showed stronger-than-expected upward pressure, official data showed on Tuesday.
In a report, the Commerce Department said that producer prices increased by a seasonally adjusted 0.5% last month, higher than the forecast for a 0.2% advance and compared to the 0.1% decline seen in March.
Year-over-year, the producer price index (PPI) rose 2.5% in April, compared to expectations for a gain of 2.2% and following a 2.3% increase in the preceding month.
The core producer price index, that excludes food and energy, advanced by 0.4% in April, higher than forecasts for a gain of 0.2% and compared to the prior month’s unchanged reading.
Core producer prices increased at an annualized rate of 1.9% last month, in line with forecasts and compared to forecasts for a 1.7% increase and a gain of 1.6% in March.
Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories. Furthermore, when producers pay more for goods, they are more likely to pass price increases on to the consumer, so PPI could be considered a leading indicator of inflation.
After the report, which was released simultaneously with weekly jobless claims, EUR/USD was trading at 1.0841 from around 1.0842 ahead of the release of the data, GBP/USD was at 1.2854 from 1.2855 earlier, while USD/JPY was at 114.03 from 113.92 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 99.72, compared to 99.69 ahead of the report.
Meanwhile, U.S. stock futures pointed to a lower open. The Dow futures fell 0.20%, the S&P 500 futures lost 0.2254%, while the Nasdaq 100 futures traded down 0.17%.
Elsewhere, in the commodities market, gold futures traded at $1,221.60 a troy ounce, compared to $1,222.88 ahead of the data, while crude oil traded at $47.82 a barrel from $48.00 earlier.