US factory gate prices showed signs of slowing down in April as the pace of growth decelerated both on a month-to-month and annual basis. 

The index for PPI final demand increased 0.5% in April matching estimates and softer than the 1.6% in March. Annually, prices increased 11% down from the 11.5% print last month. 

April’s the rise in the index was primarily attributable to a 1.3% advance in prices for final demand goods. The price index for construction increased 4%, while prices for services was unchanged. 

The Federal Reserve continues to wrestle with high prices and todays PPI numbers will provide no comfort. Data suggest pipeline inflation will continue to filter through to consumer prices in the months ahead. Chair Jerome Powell speaking last week said,”inflation is much too high,” and the US central bank would ”move expeditiously to bring it back down.” 

Mahir Rasheed, US economist at Oxford Economics said, “Coupled with yesterday’s modest reprieve in consumer price inflation, the latest PPI data offer tentative signs that price pressures perhaps peaked early in Q2. Still, with demand remaining fairly buoyant and the supply side of the economy facing persistent supply-side headwinds, it may be too early to celebrate April's moderation in the PPI. We remain patient and will look for future PPI readings to confirm whether inflation pressures are indeed subsiding.” (LiveSquawk – Continue Reading)

The Senate voted to confirm Jerome Powell for a second four-year term as Federal Reserve chair on Thursday, trusting him to tackle the highest inflation to confront the country in decades.

The overwhelmingly bipartisan 80-19 vote comes as the Fed grapples with soaring prices amid criticism it was slow to act against a threat that’s angered Americans and hammered President Joe Biden’s popularity.

Powell’s Fed began raising interest rates in March and says it will keep going until price pressures cool, seeking a soft landing that doesn’t crash the economy. But critics doubt the central bank can avoid a recession as it tightens monetary policy that had been eased dramatically during the pandemic. (Bloomberg – Continue Reading)

Senator Elizabeth Warren wants companies to disclose the rationale for charging more for their products and empowering federal regulators to go after companies ranging from oil producers to food sellers that have sharply increased prices.

Legislation she’s drafted, obtained by Bloomberg News, would allow the Federal Trade Commission and state attorneys general more leeway to investigate sellers that charge excessive prices. The legislation also clarifies that price gouging anywhere in the supply chain is illegal.

Warren’s bill is being introduced as consumer prices have been rising at the fastest rate in decades. With inflation becoming the top concern for voters, Democrats in Congress are seeking ways to tame price hikes ahead of the November mid-term elections. However getting the legislation passed would require the support of at least 10 Republicans in the evenly divided Senate, an unlikely prospect with GOP lawmakers pinning blame for high prices on Democratic policies. (Bloomberg – Continue Reading)