The Producer Price Index year-over-year inflation declined from 3.0 % to 2.6 %.

Analyst Opinion of Producer Prices

The Producer Price Index declined year-over-year. Food prices did moderate. Here is what the BLS said in part:

A major factor in the April advance in prices for final demand services was the index for machinery, equipment, parts, and supplies wholesaling, which climbed 0.9 percent. The indexes for services related to securities brokerage and dealing (partial), residential real estate loans (partial), airline passenger services, and wireless telecommunication services also moved higher. In contrast, prices for traveler accommodation services fell 3.2 percent. The indexes for health, beauty, and optical goods retailing; legal services; and apparel wholesaling also decreased.

Among prices for final demand goods in April, the index for tobacco products jumped 2.6 percent. The indexes for carbon steel scrap; search, detection, navigation, and guidance systems; pharmaceutical preparations; diesel fuel; and prepared poultry products also increased. Conversely, prices for fresh and dry vegetables fell 17.8 percent. The indexes for chicken eggs, beef and veal, residential electric power, and basic organic chemicals also moved lower.

The PPI represents inflation pressure (or lack thereof) that migrates into consumer price.

The market had been expecting (from Bloomberg):

month over month change Consensus Range Consensus Actual PPI-Final Demand (PPI-FD) 0.2 % to 0.5 % +0.3 % +0.1 % PPI-FD less food & energy (core PPI) 0.1 % to 0.3 % +0.2 % +0.2 % PPI-FD less food, energy & trade services 0.2 % to 0.4 % +0.4 % +0.1 %

The producer price inflation breakdown:

category month-over-month change year-over-year change final demand goods +0.0 %   final demand services +0.1 %   total final demand +0.1 % +2.6 % processed goods for intermediate demand +0.5 % +4.7 % unprocessed goods for intermediate demand +0.9 % +3.2 % services for intermediate demand +0.3 % +3.1 %