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Tuesday, November 30, 2021
HomeNewsEconomyConsumer Sentiment Rose In April, But Inflation Is On The Horizon

Consumer Sentiment Rose In April, But Inflation Is On The Horizon

A reading on consumer sentiment from Thomson Reuters and the University of Michigan rose in April to 82.6, which is the highest level since July and up from 80 in the prior month. The index beat economists’ expectations, as Wall Street was looking for a reading of 81.

However, new data from the Labor Department suggest the gains are likely to be short-lived.

Labor reported Friday wholesale prices rose 0.5 percent in March, which was the biggest increase since June, and higher than expectations for a 0.1 percent increase. When Labor excludes the food and energy components, prices rose 0.6 percent, and again wider than the 0.2 percent increase Wall Street expected.

The increase in Labor’s seasonally adjusted producer price index for final demand was the largest in nine months, since March of 2011.

Food prices, alone, sharply increased by 1.1 percent, which is also the largest increase since May. In Feb., prices on food rose 0.6 percent.

The food price increase was fueled by a significant increase in the cost of pork, which rose by the largest margin since August of 2008. In fact, sausage, deli meat and boxed meat prices rose by the most since August 1980.

Food prices have now risen for a third straight month, an unmistakable trend whether short-term or not.

Meanwhile, energy prices dropped by 1.2 percent, the largest decline in nearly a year and hopefully enough to offset some consumer price pressure. Services for final demand spiked 0.7 percent, the largest gain since January 2010, after falling 0.3 percent in February.

In the 12 months through March, producer prices advanced 1.4 percent after rising 0.9 percent in February.

When excluding volatile food and energy costs, producer prices increased by 0.6 percent, which, too, was the biggest gain since March of 2011. The so-called core PPI for final demand fell 0.2 percent in the prior month of February.

In the 12 months through March, core PPI for final demand rose 1.4 percent after increasing 1.1 percent in February.

Written by
Staff Writing Group

PPD Business, the economy-reporting arm of People's Pundit Daily, is "making sense of current events." We are a no-holds barred, news reporting pundit of, by, and for the people.

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