Stocks in New York Continue to Unwind

"That's not a good indication," said Peter Cardillo, chief market economist with Avalon Partners. "It says that higher oil prices are having an effect across the board, and it's being passed onto the consumers to a certain degree."

Still, Ian Shepherdson, chief U.S. economist with High Frequency Economics, pointed out that the numbers are consistent with a mere 2% year-over-year rise for core finished goods a year from now. "Not much to worry about," he said.

James Glassman, senior economist with JPMorgan Chase, went even further. "It's an irrelevant number to me," he said. "It basically represents 16% of what the consumer pays, because it's only focused on domestically made goods, not services. As a matter of fact, I'm surprised the market reacted the way it did."

The headline producer price index, which includes energy and food, registered a 0.2% price rise from the prior month -- half the consensus estimate and down sharply from March's 1.1% jump.

Tony Crescenzi, chief bond market strategist with Miller Tabak and contributor to RealMoney.com, a sister site to TheStreet.com, wrote: "The only solace in these horrendous figures is the fact that the financial markets have already largely digested the idea that producer prices are rising rapidly, a fact that can't be missed when watching commodities prices on a day-to-day basis."

Meanwhile, Federal Reserve vice chairman Donald Kohn predicted that inflation will moderate over time, and that spiking commodities should inflict "limited" spillover effects, in a speech at a New Orleans conference this morning. The caveat, he added, is that those forecasts "depend critically on the continued stability of inflation expectations." He also voiced concern that the public's longer-term expectations may become "unmoored" because of ballooning commodities-strained numbers, or because of a widespread misinterpretation of the Fed's months-long interest-rate easing campaign.