Wholesale price data a good sign on inflation

WASHINGTON — Wholesale prices in the country rose modestly last month, the latest sign that inflationary pressures may be easing more than a year after the Federal Reserve unleashed an aggressive campaign of steadily higher interest rates.

From March to April, the government’s producer price index rose just 0.2% after falling 0.4% from February to March, held down by falling prices for food, transportation and warehousing.

Compared with a year earlier, wholesale prices rose just 2.3%, the 10th consecutive slowdown and the lowest figure since January 2021.

Lower energy prices helped slow the annual inflation rate.

Excluding volatile food and energy prices, so-called core wholesale inflation rose 0.2% from March and 3.2% from 12 months earlier.

The year-over-year increase in core wholesale inflation was the lowest since March 2021 and marked the seventh straight slowdown.

The Fed pays particularly close attention to core prices, which tend to be a better gauge of the economy’s underlying inflation pressures.

The producer price index that the Labor Department issued Thursday reflects prices charged by manufacturers, farmers and wholesalers. It can provide an early sign of how fast consumer inflation will rise.

The index is used to help calculate the Fed’s favored inflation gauge: the Commerce Department’s personal consumption expenditures index, due out May 26.

April’s mild producer price figures amount to “much needed and awaited good news’’ for the Fed’s fight against inflation, said Ryan Sweet, chief U.S. economist at Oxford Economics.