Breitbart Business Digest: The AI Inflation Shock Hidden Inside the PPI Report

There’s an AI Shock Story Lurking Under the Hood of the April Producer Price Report

Producer prices came in far hotter than expected in April, with the headline Producer Price Index rising 1.4 percent for the month—nearly triple Wall Street’s forecast—and six percent from a year earlier. Services prices rose 1.2 percent, and goods prices climbed two percent.

Energy prices have understandably captured most of the attention. Final demand energy prices jumped 7.8 percent in April. Gasoline alone surged 15.6 percent. Diesel fuel, jet fuel, and residual fuels also rose. Not surprisingly, energy-adjacent services—especially trucking services—also rose sharply. This was, first and foremost, an energy-driven supply shock.

But that is not the whole story. Hidden beneath the soaring energy prices, the April PPI revealed that we’re seeing a totally different kind of inflation in another part of the economy. It is demand-driven rather than a supply shock. And it