US Inflation Cools Further as PPI Drops Sharply

The financial market received fresh signs of cooling inflation in the United States on Thursday following the Producer Price Index (PPI) report.

The U.S. Producer Price Index (PPI), preferred by economists and charting a preferred course through the financial market, reportedly pointed to weaker-than-expected producer prices in April. This signaled that inflation might be cooling further.

The reported lower-than-expected inflation reading could be a key factor in triggering a recovery in Bitcoin and altcoins, according to market analysts.

Hotter-Than-Expected PPI Could Weigh On Bitcoin Price

According to X user CyclesWithBach, the U.S. 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.

🚨BREAKING: US MACRO DATA RELEASED!

🇺🇸 PPI (Apr), 2.4% Vs. 2.5% Est. (prev. 2.7%)

🇺🇸 Core PPI, 3.1% Vs. 3.1% Est. (prev. 3.3%)

🇺🇸 PPI (Apr) MoM, -0.5% Vs. 0.2% Est. (prev. 0.0%)

🇺🇸 Core PPI MoM, -0.4% Vs. 0.3% Est. (prev. 0.4%)

🇺🇸 Jobless Claims, 229K Vs. 229K Est. (prev…

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%, underwhelming 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, slipping past the 0% estimate but lagging far behind March’s 1.4% jump.

At the same time, the preferred inflation gauge pointed to weaker-than-expected producer prices in April, continuing the trend of cooling inflation signaled by Wednesday's report on consumer prices.

The reported lower-than-expected inflation reading could be a key factor in triggering a recovery in Bitcoin and altcoins, according to market analysts.

Further U.S. inflation data on Thursday showed a mixed picture of the labor and manufacturing sectors, rendering a snapshot of the world’s largest economy in a snapshot.

The U.S. dollar rose broadly on Thursday after better-than-expected jobless claims and PPI data, while U.S. stocks edged higher.

The reported lower-than-expected inflation reading could be a key factor in triggering a recovery in Bitcoin and altcoins, according to market analysts.

The preferred inflation gauge by economists showed that U.S. producer prices fell more sharply than expected last month, continuing the trend of cooling inflation signaled by Wednesday's report on consumer prices.

The U.S. PPI for April rose 2.4% year-on-year, lagging economists' projections of 2.5% and slowing from 2.7% in March, the Labor Department said. Economists polled by Dow Jones had expected a 2.5% increase in the PPI on a year-over-year basis.

The monthly PPI numbers showed an even sharper move, dropping 0.5% compared to the expected 0.2% increase. This marks the most significant drop in producer prices in recent months, further indicating that inflation is steadily easing.

Economists polled by Dow Jones had anticipated a 0.2% decrease in the PPI on a month-over-monthly basis.

The PPI data arrived one day after the Labor Department reported that the CPI rose 2.3% year-on-year in April, slower than the expected 2.4% increase and continuing the trend of slowing inflation.

The core CPI, which excludes volatile food and energy components