The U.S. economic recovery stoked just enough demand to let factories increase prices for appliances, autos and other goods in June.
The producer price index rose 0.1 percent, the Labor Department said, the first increase in three months. The department also reported that initial claims for jobless benefits rose last week, when auto plants shut to retool for new models.
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Wholesale costs remained 2.1 percent lower than in June 2001, early in the recession, and consumers may not notice much of last month’s rise. General Motors Corp. and Wal-Mart Stores Inc. have used discounts to lure customers. Sales at U.S. stores open at least a year rose 5.1 percent in June from a year earlier, the
biggest increase since March, according to a Bank of Tokyo-Mitsubishi Ltd. index.
“The manufacturing recovery is cementing itself,” said Ian Morris, chief U.S. economist at HSBC Securities USA Inc. in New York. Price increases at the producer level “aren’t feeding through to finished goods, and may never.”
Subdued inflation makes it easier for Federal Reserve policy makers to keep the benchmark interest rate at a four-decade low and provide a boost to the economic recovery.
States received 403,000 initial applications for unemployment benefits in the week that ended Saturday, up from a revised 387,000 the previous week, the Labor Department said.
Bloomberg News
