Wholesale Prices Climbed in April

A mixed report on wholesale prices for April revived inflation fears amid an unexpected jump in raw material prices. The Labor Department reported the producer price index for finished goods rose 0.2% in April, less than the 0.4% gain expected on Wall Street. The report contained a surprise reading on core inflation, however. The report's core index, which excludes food and energy items, climbed by 0.4% last month, seasonally adjusted. That's double the 0.2% rate expected on Wall Street. The latest report suggests corporate profits will be under pressure going forward. A weak economy and sluggish consumer demand will make it difficult for companies to raise prices to consumers, said Joshua Shapiro, analyst for MFR Inc. At the same time, prices of materials will be rising. "Consequently, higher input prices will probably have an increasingly negative effect on profit margins in the months ahead," he said.