STORY: U.S. producer prices rose more than expected in April, indicating that inflation remained stubbornly high early in the second quarter.
The report from the Labor Department on Tuesday showed strong gains in the costs of services like portfolio management and hotel rooms though the cost of food declined.
Producer prices rose 0.5% last month, above the 0.3% gain predicted by economists polled by Reuters.
However, prices in March were revised lower.
Traders trimmed their expectations for a September interest rate cut from the Federal Reserve.
Consumer prices data comes out Wednesday.
Fed Chair Jerome Powell called the producer prices report mixed while addressing a banking event in Amsterdam Tuesday.
He also said he expects inflation to continue declining through 2024 as it did last year, though his confidence in that belief has fallen after prices rose more quickly than expected through the first quarter.
Still, Powell said he felt it was unlikely that the Fed would have to raise interest rates again.
