U.S. PPI (Apr) Actual 0.3%, Expected 0.2%, Previous -1.2%
U.S. Core PPI (Apr) Actual 0.1%, Expected 0.1%, Previous 0.0%
Release Explanation: The rate of inflation of manufacturers when purchasing Goods and Services; the rate of Inflation at the factory Gate.
Economic impact: An increase in the price of raw Goods and services usually gets passed on to the consumer; therefore this is the first stage on Retail Inflation. “This can go on to affect CPI, Retail Sales and Consumer Confidence. This is an inflationary report and therefore is a pre-cursor to CPI data,” TheLFB-Forex.com Trade Team said.
TheLFB-Forex.com Trade Desk Thoughts: Following the strong declines seen in March, producer prices rose by 0.3% in April, the Department of Labor said today. This was slightly higher than the 0.2% read economists had expected to see. Core prices, excluding volatile items such as food and energy, rose again by 0.1% in March.
At the earlier stage of processing, prices received by manufacturers for intermediate goods decreased, by 0.5%, for the ninth consecutive month in April. The index for crude materials declined 3.0% following a 0.3% decrease in March. Among finished goods, prices for consumer foods rose 1.5% in April following a 0.7% decrease in the previous month. The index for finished energy goods edged down 0.1% subsequent to a 5.5% decline in March.
The numbers imply that demand is still weakening, TheLFB-Forex.com Trade Team said. It's a cycle of declining jobs and tightening credit that's difficult to break, they added. For the year, prices decreased 3.7% in April.
Forex Technical Reaction: The S&P surged 5 points during the news release, re-testing the 886.00 intra-day resistance area. In the currency market, the euro rose 30 pips, bouncing off from TheLFB S1 (1.3530)