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Economic Report: U.S. wholesale inflation slows in April, but prices still up 11% in the past year


The numbers: The cost of wholesale goods and services rose milder 0.5% in April vs the prior month, but intense inflationary pressures in the guts of the economy showed little sign of relenting.

Economists polled by The Wall Street Journal had forecast a 0.5% advance. In March, wholesale prices jumped 1.6% largely because of a surge in oil prices.

The increase in wholesale prices over the past year, meanwhile, slowed to 11% from 11.5%, the government said Thursday.

That’s the first drop since the pandemic started, mirroring a decline in the rate of consumer inflation last month.

Trends in wholesale prices offer clues on the path of inflation — what consumers end up paying for what they buy. Yet inflation is still running at the highest rate in 40 years and the wholesale report didn’t show much sign that price pressures will ease considerably in the near future.

So-called core wholesale prices rose 0.6%, roughly in line with the average increase over the past 12 months. Wall Street had expected a 0.6% advance.

The Federal Reserve views the core rate as a clearer window into inflation trends because it strips out volatile food and energy prices. Households still devote a large share of their budgets to fuel and meals, however.

Big picture: High inflation has become a big worry for consumers, businesses and investors. It’s also causing a political crisis in Washington.

The Fed is moving to lift interest rates rapidly to try to contain inflation, but it takes time for higher rates to have an effect.

What’s more, a lot of the inflation is tied to global supply shortages that the central bank cannot resolve unless it tries to slow the economy — an approach that could tip the U.S. into recession.

Market reaction: The Dow Jones Industrial Average

and S&P 500

were set to decline again in Thursday trades. Stocks have fallen sharply in the past week.

Bond Report: Treasury yields fall as stocks remain under pressure

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