U.S. producer inflation is projected to stay elevated in April as higher energy prices, fueled by ongoing geopolitical tensions involving Iran, continue to add pressure to wholesale costs and reinforce concerns over persistent inflation across the economy.
The U.S. Producer Price Index (PPI), scheduled for release by the U.S. Bureau of Labor Statistics on May 13, is forecast to increase 0.5% month-on-month, matching the pace recorded in both February and March. Core producer prices, which exclude food and energy, are expected to rise 0.3%, following a more modest 0.1% increase in the previous month.
On an annual basis, headline producer inflation is projected to accelerate to 4.9%, marking a third consecutive monthly increase and reaching its highest level since January 2023, compared with 4.0% in March. Annual core producer inflation is also expected to climb, rising to 4.3% from 3.8% in both February and March, which would represent its highest reading since February 2023.
The anticipated increase comes as energy markets remain sensitive to geopolitical instability in the Middle East, with elevated oil and fuel costs continuing to influence supply chains and production expenses across multiple sectors.
Markets are expected to closely monitor the report for additional signals regarding inflationary pressures and the potential implications for Federal Reserve monetary policy. A stronger-than-expected reading could reinforce expectations that policymakers may maintain a cautious stance on interest rate adjustments in the near term.
The data release is likely to remain a key focus for investors assessing the broader impact of geopolitical tensions on inflation dynamics and the outlook for the U.S. economy.
