Against the backdrop of the US consumer price index for March, released last week, rising sharply compared to forecasts, the producer price index – reflecting inflation at the wholesale level – which was released on the evening of April 14th (Vietnam time), has been closely monitored and assessed by many economic newspapers. The general trend indicates that inflation in the US is undergoing complex developments.
The US producer price index for March, just released, was much lower than forecasts. However, overall, it shows that inflation in the US is rising sharply compared to previous years.
According to CNBC, the Producer Price Index (PPI), a measure of input costs for goods and services, rose 0.5% in March after seasonal adjustment, a much lower increase than the Dow Jones estimate of 1.1%.
Excluding food and energy, the core PPI rose 0.1%, lower than the forecast of 0.5%. However, from Reuters' perspective, the PPI increased 4% year-on-year, the strongest increase since February 2023.
In particular, a 1.6% increase in commodity costs was the main reason for the rise in the PPI index in March. A more significant factor contributing to the increase in commodity prices was the 15.7% rise in fuel costs.
According to analyses in the press, the PPI acts as an early indicator, helping to forecast the prices consumers may face in the coming months. A portion of the PPI data is also included in the calculation of the Personal Consumption Expenditures Price Index – a measure of inflation that the Federal Reserve pays close attention to.
CNN Business, citing RSM US economists, reported that categories within the PPI directly related to the Fed's preferred inflation measure saw stronger increases in March. Notably, airline tickets rose by 4.1%.
This suggests that personal consumption expenditure (PCE) price inflation, particularly core PCE in March, may be accelerating more sharply than what the PPI data alone reflects.
The Wall Street Journal noted that this situation also poses a new challenge for the Fed, as the agency is simultaneously dealing with a labor market showing signs of stagnation.
Following the conflict in Iran, traders believe the Fed will not make any further interest rate cuts this year. This trend is a stark contrast to the beginning of the year, when they predicted one or two more rate cuts.
Later this month, the Federal Reserve will hold a two-day policy meeting. Current forecasts suggest that the likelihood of the Fed keeping interest rates unchanged is over 99%.
Source: https://vtv.vn/lam-phat-tai-my-dien-bien-phuc-tap-100260415102953014.htm
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