April 2008 Wholesale Inflation Results are Old News

Posted by Louis Navellier on 5/20/08 9:29 am

The April Producer Price Index (PPI) report should be taken with a grain of salt.  It showed that wholesale inflation rose just 0.2% last month, half as much as expected, thanks to a 4.6% drop in gasoline prices.

The PPI core rate rose 0.4%, twice as much as expected.  The core was boosted by a 1.3% jump in light truck and 0.4% increase in car prices.

There is no way these results will be sustained in May.  Gasoline prices have gone through the roof this month, up about $0.30 a gallon, and truck and auto prices are expected to drop now that consumers are getting pinched by record food and energy prices.

I’m expecting ugly results for the CPI and PPI in May.

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