How was that for odd? The Core Rate was much higher than the headline — 0.4% versus 0.2%.
It has to do with the way seasonal adjustments are calculated — and not, as some have suggested, a drop in energy prices.
Follow this if you will: Each year in the Spring, we get a fairly large seasonal adjustment. If memory serves, its about a ~7% increase in Energy for April. This year, however, energy prices are up so much in advance of April, that we only got a "modest" one month energy increase of 5.2%. In other words, the market ran up in advance of the usual seasonal gains. Hence, a 5.2% increase looks like a reduction after seasonal adjustments. (Note: I need to double check the precise #s).
To get the NSA, we go to the Year over Year data from BLS: "From April 2007 to April 2008, finished goods prices rose 6.5%, finished energy goods index advanced 17.5%, (finished goods less foods and energy increased 3.0%), and the index for finished consumer foods climbed 5.2%. For the 12 months ended April 2008, prices received by manufacturers of intermediate goods advanced 10.5%, and the crude goods index jumped 34.3%." The charts below are quite informative as to these year over year gains.
Inflation contained? Hardly . . .
Producer Price Index, April 2008, YoY
Crude, Intermediate, and Finished Goods, April 2008 YoY
charts by Jake
Producer Price Indexes – April 2008
BLS, May 20, 2008
CPI Seasonal Adjustments