Wholesale Prices Gain 0.2% in April

WASHINGTON — Prices at the wholesale level rose in April for the first time in seven months, and retail sales rebounded from a flat month in March, according to government figures released Wednesday.

The 0.2% seasonally adjusted gain in the Labor Department’s producer price index--the first since September--had been expected because of stabilizing world petroleum prices. Increased food and tobacco costs led the gain.

The core rate of prices, which excludes food and energy, also rose 0.2% in April. While modest, the increase was more than analysts expected and was the largest increase in seven months. However, about half the increase was accounted for by a 3.4% jump in tobacco prices. Tobacco producers have been pushing prices up regularly in anticipation of expensive legal settlements. Food prices rose 0.4% last month.

Since early fall, producer prices have been held down by tumbling energy costs and declines in the price of goods exported from economically ailing East Asia.

The influence of the energy decline, however, is waning. Energy costs edged just 0.1% lower last month after six months of steeper drops, the Labor Department said.

Separately, the Commerce Department said retail sales rose a moderate 0.5% in April, slightly less than the 0.6% rise economists expected, after being unchanged in March and surging in February and January.

Unseasonably warm winter weather and a plentiful supply of jobs supported sales early in the year. Easter and school holidays provided the rebound in April.

“It’s a Fed policymaker’s dream world,” Ken Mayland, chief economist at KeyCorp in Cleveland, told Bloomberg News. “We’ve got strong growth and low inflation.”

The Federal Reserve Board has faced that same combination for more than a year and left the overnight bank lending rate unchanged at 5.50%. That’s why analysts don’t expect central bankers to push the overnight bank rate higher when they meet Tuesday.

The gain in retail sales was broad-based, with strength in building materials and apparel. Sales of big-ticket durable goods rose 0.5%.

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Producer Prices

Index of finished goods prices; 1982=100; seasonally adjusted:

April: 130.3

Source: Labor Department

Retail Sales

In billions of dollars, seasonally adjusted:

April: $220.0

Source: Commerce Department