2018.05.0922:04:00UTC+00U.S. Producer Prices Increased Slightly in April

U.S. producer prices inched only slightly higher in April, a possible sign that inflation pressures in the economy remain relatively modest.

The producer-price index, a measure of the prices businesses charge for their goods and services, increased a seasonally adjusted 0.1 percent in April from the previous month, the Labor Department. That lowered the year-on-year increase in the PPI to 2.6 percent from 3.0 percent in March.

The slowdown in wholesale price growth reported by the Labor Department is, however, likely temporary as manufacturers have been reporting paying more for raw materials. Economists also expect oil prices to surge after President Donald Trump on Tuesday pulled the United States out of an international nuclear deal with Iran.

The so-called core PPI had increased by 0.4 percent in each of the past three months. In the 12 months through April, the core PPI rose 2.5 percent after jumping 2.9 percent in March.

Core goods prices increased 0.3 percent in April, matching March's gain. Prices for intermediate processed goods increased 0.5 percent while the cost of unprocessed goods shot up 0.9 percent.

Inflation is flirting with the Federal Reserve's 2 percent target. The U.S. central bank's preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, increased 1.9 percent year-on-year in March and is expected to breach its target in the coming months.

Fed officials have in recent days signaled they would not be too concerned if inflation overshot the central bank's target, reiterating a message in a statement issued at the end of a two-day policy meeting last Wednesday.