Eye-Popping U.S. Producer Price Jump as Strait of Hormuz Stays Closed to Traffic
May 13, 2026
U.S. producer prices in April leaped 1.4% on month the most in 44 months and trippling market expectations. Year-on-year PPI inflation, which had receded from 11.7% at peak in the summer of 2022 to a mere 0.3% in mid-2023 and which began this year at 3.1% in January, increased 1.7 percentage points to a 49-month high of 6.0% in April instead of holding steady at 4.3% as analysts were predicting. Core PPI inflation that excludes food and energy printed at a 40-month high of 5.2%, and the producer price index that excludes food, energy and trade rose by 0.8 percentage points to 4.4%.
Price data released today in other economies included
- April German wholesale prices, which jumped by 2.0% on month and rose to a 38-month year-on-year high of 6.3% from 4.1% in March, and 1.2% in the previous three months.
- April French consumer prices, which were unrevised from the preliminary estimate with gains of 1.0% versus March and a 21-month high year-on-year advance of 2.2%. The energy component was 14.3% above its year-earlier level.
- Portuguese CPI inflation in April, which was revised 0.1 percentage point lower to 3.3% but still above 2.7% in March.
- Dutch consumer prices rose 1.1% between March and April, their biggest monthly increase in 9 months. Year-on-year inflation there of 2.8% was the most in 4 months.
- Sweden’s -0.1% CPI inflation reading for April was left unrevised and represents a six-year low. The core CPI-F rate was halved to 0.8%.
- Czech CPI inflation accelerated to 2.5% in April from 1.9% in March.
- Finnish consumer price inflation of 1.5% in April followed 1.3% in March, 0.6% in February and -0.2% at the start of this year, which happened to be the most deflationary since early in the pandemic o f 2020.
President Trump is now in China. Geopolitical issues such as the closed Strait of Hormuz, expensive energy costs, Taiwan’s safety from invasion, whether AI development should be regulated, and the war between Russia and Ukraine will presumably take a backseat to efforts to secure some very profitable business deals.
British Prime Minister Starmer’s hold on the position continues to look tenuous in the wake of last week’s local election results.
Overnight trading in foreign exchange saw the dollar rise 0.3% against the euro and Swiss franc, 0.4% relative to the kiwi, 0.2% vis-a-vis the sterling and 0.1% relative to the yen. The ten-year U.S. Treasury and Japanese JGB yields are two and four basis points higher. Alternatively, the comparable British gilt yield has moved 2 bps lower, and comparable yields are unchanged in France, Italy, Spain and Switzerland.
Stock markets are mixed. In the U.S., the Nasdaq has rebounded 0.4% thus far, but the Russell 2000 and DOW show dips of 0.6% and 0.3%. The German and Italian stock markets are up 0.6% each. The South Korean Kospi experienced a 2.6% improvement, while losses of 2.4% in Indonesia, 1.3% in Taiwan, and 0.2% in Hong Kong have also occurred. Indonesia’s rupiah continues to hover around record lows.
West Texas Intermediate crude oil rose another 1.2%. Gold’s price is also 1.2% higher, while Bitcoin dropped by 1.0%.
The second estimate of Euroland GDP growth last quarter showed an unrevised quarterly 0.1% rise that depressed the four -quarter growth comparison to 0.8% from 1.3% in the final quarter of 2025. Among economies not in the initial release, GDP in the Czech Republic rose 0.2% versus the prior quarter and 2.1% year-on-year; Estonian GDP climbed0.6% on quarter and 1.3% on year; Lithuanian GDP fell 0.4% on quarter but exceeded its year-earlier level by 2.5%; and Hungarian GDP increased 0.8% on quarter and 1.7% on year. Employment in the euro area experienced a slower 0.1% quarter rise that trimmed the year-on-year increase to a mere 0.5%.
Industrial production in the euro area during March was a tad weaker than anticipated, ticking up 0.2% on month but posting a 2.1% year-on-year decline. Output in the first quarter was 0.9% lower than the prior quarter’s average and 1.2% below the level in the first quarter of 2025.
The Australian wage cost index posted another quarterly 0.8% increase in 1Q 2026 and was 3.3% above the year-earlier level.
Japan’s economy watchers index, a gauge of service sector workers’ perceptions, fell more sharply than anticipated to a 50-month low in April, but optimism about the future strengthened slightly. Japan’s current account surplus of JP:Y 9.55 trillion in 1Q was 32% larger than a year earlier.
A 4.0% on-year rise in Brazilian retail sales in March was the most in 11 months.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Euroland GDP and industrial production, Japanese current account, U.S. producer prices
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