U.S. Wholesale Prices Little Changed in May

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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% gain the prior month
  • Wholesale prices advanced 2.4% from a year earlier (forecast was 2.3%), after rising 2.5%
  • PPI excluding food and energy rose 0.3% from prior month and was up 2.1% from May 2016

Key Takeaways

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.

Other Details

  • 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

— With assistance by Kristy Scheuble

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