Q1’s 2.9% decrease in profits follows a 5.4% increase in Q4/2024.

But the PPI components that feed into the Fed’s preferred inflation measure—the PCE price index—were favorable across the board in November.

The spending report bolsters the case for a slower pace of interest rate cuts following last month's outsized reduction.

GDP rose by more than 2.5% for a sixth consecutive quarter, "the longest stretch of such solid growth since 2006."

The PPI rose 0.1% from a month earlier and 2.2% from a year ago.

"These days we mostly care about what the PPI means for the Fed's preferred PCE deflator measure of core consumer price inflation. In that respect, April's news was mixed but, on balance, encouraging."

Consumer prices excluding food and energy rose at a 3.3% annualized rate in the final three months of 2023.

CPI registers its first sub-5% reading in two years. Core inflation has also moderated, to 5.5%.