NEW YORK – Wholesale prices were little changed in May from the prior month, reflecting declines in the costs of fuel and food, Labor Department data showed Tuesday.
Highlights of PPI (May)
Producer-price index was unchanged (matching forecasts) following a 0.5 percent gain the prior month. Wholesale prices advanced 2.4% from a year earlier (forecast was 2.3 percent), after rising 2.5 percent. PPI, excluding food and energy, rose 0.3 percent from prior month and was up 2.1 percent from May 2016
The figures indicate a pause in inflationary pressures in the production pipeline after climbing in the year ended in April at a rate that matched the fastest since September 2012. Prices excluding food, fuel and trade services, a figure some economists prefer because it’s less volatile, were up 2.1 percent on a year-over-year basis for a second month.
Federal Reserve officials are widely expected to raise the benchmark interest rate at the conclusion of their two-day meeting Wednesday, with slow but fairly steady gains in inflation permitting them to be patient about the pace of those rate increases.
Excluding volatile categories of food, energy, and trade services, producer costs fell 0.1 percent after jumping 0.7 percent the prior month. Goods prices fell 0.5 percent after a 0.5 percent April increase; services climbed 0.3 percent after a 0.4 percent advance. Cost of energy dropped 3 percent from prior month, the most in more than a year; food costs fell 0.2 percent. Prices for final demand services increased 0.3 percent, with half the increase attributed to margins at fuel retailers Services for final demand rose 2.1 percent from a year earlier, the biggest gain since December 2014.
Michelle Jamrisko is a reporter fro Bloomberg News.