Queue the Inflation Trolls

The Producer Price Index rose by 0.6% in April:

U.S. producer prices recorded their largest increase in 1-1/2 years in April as food prices surged, in a potential sign inflation pressures may be creeping up.

The Labor Department said on Wednesday its producer price index rose 0.6 percent, the biggest gain since September 2012. That built on a March increase that was nearly as large.

The department revamped it PPI series at the start of the year to include services and construction. Since then, it has been surprisingly volatile, largely because of big swings in prices received for trade services.

Still, economists, who had expected only a 0.2 percent gain, saw the latest rise as an indication that price pressure may be building. Officials at the Federal Reserve have long worried that inflation was running too low.

I will note that the trend for this year is still less than 6%, which is where I would set the target, and it appears that their statistical set is kind of hinky, but expect the inflation gnomes to come out and run around with their hair on fire.