A gauge of U.S. business prices rose to the highest level in five years, another sign inflation pressure is picking up across industries.
The producer-price index for final demand, measuring changes in the prices that U.S. companies receive for their goods and services, increased 2.5% in April from a year earlier. The advance marked the index's steepest climb since February 2012, the Labor Department said Thursday.
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Excluding often-volatile prices for food and energy, the index grew 1.9% in April from a year earlier. Import prices, another gauge for inflation, accelerated 4.1% in April from a year prior, the Labor Department said Wednesday.
The recent figures suggest that broad-based price pressures are firming in the U.S., despite soft March data that hinted otherwise.
Though energy prices are still a factor, "we're seeing it more generally because of the tighter labor market and greater pricing power for businesses," said Gus Faucher, chief economist at PNC Financial Services Group.
Producer prices in April increased a seasonally adjusted 0.5% from March. Prices on services, such as securities brokerages and investment advice, contributed heavily to April's gains.
PPI is an inflation gauge that looks at prices businesses receive from customers, including consumers, other businesses and governments. As a result, changes in the index don't necessarily directly reflect what consumers pay. But PPI readings generally follow the same trends as other major inflation gauges.
The personal-consumption-expenditures price index, which is the Federal Reserve's preferred inflation gauge, advanced 1.8% year over year in March. The Fed's target is 2% inflation.
The Fed is expected to raise interest rates two more times this year, in part because inflation has firmed.
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(END) Dow Jones Newswires
May 11, 2017 12:01 ET (16:01 GMT)