US Inflation Cools Further as PPI Drops Sharply

According to X user CyclesWithBach, the US PPI for April rose 2.4% year-on-year. However, it fell short of the 2.5% forecast and down from 2.7% the previous month.

Similarly, the monthly PPI figure showed an even sharper move, falling 0.5% compared to the expected 0.2% increase. This marks the most significant drop in producer prices in recent months and adds weight to signs that inflation is steadily easing.

Core PPI, which strips out food and energy costs, came in at 3.1% year-on-year, matching estimates but down from 3.3% in March. On a monthly basis, core PPI declined 0.4%, undercutting expectations of a 0.3% rise. These numbers follow Tuesday’s release of April CPI data, which showed consumer inflation dropping to 2.3%, its lowest since early 2021.

That CPI news sparked a rally in Bitcoin, pushing it to new local highs as traders bet on the Federal Reserve easing interest rates later in the year. However, the climb was short-lived. Profit-taking quickly kicked in, dragging Bitcoin back below $102,000. The crypto market has since steadied, but the mood remains watchful.

It is worth noting that the broader macro picture also showed mixed signals. Jobless claims stood at 229,000, exactly as forecast.

Meanwhile, the Philadelphia Fed Manufacturing Index improved to -4, exceeding expectations of -11 and rebounding from -26.4 in April. Retail sales rose 0.1% month-on-month, slightly above the 0% estimate but far below March’s 1.4% jump.

Market analysts are closely watching the January US CPI report, which aligns with the released easing inflation data. They noted that a lower-than-expected inflation figure could trigger a recovery in Bitcoin and altcoins.