Rising Fuel Pushes Up U.S. Producer Prices for Second Month
Source: Bloomberg
The rebound in fuel costs pushed up U.S. wholesale prices in May for a second month, overshadowing a drop in pricing power more broadly that signals inflation will take time to move toward the Federal Reserve’s goal.
The producer-price index gained 0.4 percent, more than forecast, after a 0.2 percent increase the prior month, a Labor Department report showed Wednesday in Washington. Excluding volatile components such as food, energy and trade services, prices declined for the first time in seven months.
The lingering effect of the prior drop in energy and the stronger dollar means price pressures in the production pipeline may be slow to pick up. This is the last bit of inflation data Fed policy makers will see as they wrap up a meeting Wednesday to discuss the outlook for interest rates.
“We aren’t seeing a whole lot of inflationary pressures in the pipeline,” said Scott Brown, chief economist at Raymond James Financial Inc. in St. Petersburg, Florida. “On inflation, there is still no pressure for the Fed to hit the brakes.”
Read more: http://www.bloomberg.com/news/articles/2016-06-15/rising-fuel-pushes-up-u-s-producer-prices-for-second-month
