Producer Price Inflation Eases in April to 1.9%
1. Prices for finished goods increased annually by 1.9% through April, the seventh straight month of slowing year-over-year inflation rates following a 7% increase for the 12 months through September 2011. It was the smallest annual increase in producer price inflation for finished goods since October 2009 (see brown line in chart above).
2. Intermediate goods increased by only 1.1% on an annual basis through April, the smallest yearly increase since June 2010 (see red line in chart).
3. Prices for crude goods fell by 7.3% from April last year, led by sharp declines in food and energy prices (see blue line).
MP: Overall, the declining inflation rates for producer prices in April should ease some of the fears of inflationary pressures at the consumer level. Falling raw material costs for producers means that there won't be any input-cost based incentives to raise prices on consumer goods, and we can expect low and stable consumer inflation this year.