US April CPI 3.8%; PPI ~6%

The U.S. Bureau of Labor Statistics reported on May 12 that consumer prices rose 3.8% in April from a year earlier, and on May 13 said producer prices climbed 6.0% on the same basis. The back-to-back releases showed inflation accelerating at both the household and wholesale levels after March readings of 3.3% for the Consumer Price Index and 4.0% for the Producer Price Index. CME FedWatch says its probabilities are derived from 30-Day Fed Funds futures prices, though the tool page accessible publicly does not display a single fixed probability snapshot in the text available by web crawl. ### What exactly did the CPI report show in April? The Bureau of Labor Statistics said the Consumer Price Index for All Urban Consumers increased 0.6% on a seasonally adjusted basis in April, after a 0.9% rise in March. Over 12 months, the all-items index increased 3.8% before seasonal adjustment. Core CPI, which excludes food and energy, rose 0.4% in April and 2.8% from a year earlier. (bls.gov) Energy was a major driver in the April consumer report. BLS said the energy index rose 3.8% in April and accounted for more than 40% of the monthly increase in the all-items index, while shelter also rose 0.6%. Food prices increased 0.5% in the month, with food at home up 0.7% and food away from home up 0.2%. The annual comparison also moved higher across major categories. (bls.gov) BLS said the energy index increased 17.9% over 12 months, the food index rose 3.2%, and the core index increased 2.8%. The all-items annual rate was up from 3.3% in March. ### Where did the PPI jump come from? The Bureau of Labor Statistics said the Producer Price Index for final demand increased 1.4% in April on a seasonally adjusted basis, after gains of 0.7% in March and 0.6% in February. (bls.gov) On an unadjusted basis, final-demand prices rose 6.0% in the 12 months through April, the largest increase since December 2022. Services accounted for much of the monthly producer-price increase. BLS said nearly 60% of the April rise in final-demand prices was tied to a 1.2% advance in final-demand services, while prices for final-demand goods rose 2.0%. Within goods, more than three-quarters of the increase came from a 7.8% jump in final-demand energy prices. A narrower underlying measure also firmed. (bls.gov) BLS said the index for final demand less foods, energy, and trade services rose 0.6% in April and 4.4% from a year earlier, the largest 12-month increase since February 2023. ### Why are investors watching both reports together? April's CPI and PPI reports arrived on consecutive days and both showed faster year-over-year inflation than in March. (bls.gov) Consumer inflation accelerated by 0.5 percentage point, while producer inflation accelerated by 2.0 percentage points. Reuters, citing economists it polled, said the 1.4% monthly PPI increase exceeded expectations for a 0.5% gain. CME Group says FedWatch tracks the likelihood of changes to the federal target rate using fed funds futures prices. The publicly crawlable text on the FedWatch page describes the methodology and says media should attribute rate probabilities to "CME FedWatch," but it does not provide the full live table in the text captured here, so the specific social-media probability range could not be independently verified from primary-source page text. (bls.gov) ### What is the Fed looking at next? The Federal Reserve's calendar lists the next Federal Open Market Committee meeting for June 16-17, 2026, followed by a press conference on June 17. The Fed says the FOMC holds eight regularly scheduled meetings each year and releases minutes three weeks after each policy decision. The next scheduled inflation releases are also set. (cmegroup.com) BLS published the April CPI report on May 12 and the April PPI report on May 13, placing the latest inflation data in front of policymakers ahead of the June meeting. (bls.gov) (federalreserve.gov)