Forex News Preview: US Producer Price Index due at 8:30 AM EDT

The US Producer Price Index for the month of April will be released at 8:30 AM EDT.  The PPI moved to +6.9% last month on the back of higher energy and food prices.  For the month prices were up a sharp 1.1%.  This was higher than expectations. Producer price increases are not a problem unless they are passed on to the consumers.  In a strong economy, producers are in a better position to pass the increased costs to consumers.  During slow economic times, however, much of the costs are absorbed either by increase efficiency or reduced profit margins

This month the expectation is for a more modest month on month rise of 1.1%. and 0.2 % ex food and energy.  The year on year increase is expected to show a gain of 6.7% and ex food and energy +2.9%.