MIXED READING: A steep drop in gasoline costs drove down a measure of U.S. wholesale prices in May by the most since July 2009. But outside the food and energy categories, prices increased moderately.
THE DETAILS: The producer price index fell 1 percent in May, after dropping 0.2 percent in April, the Labor Department reported. Gasoline prices dropped nearly 9 percent, the most in almost three years. Food costs also fell. Excluding food and energy, the so-called “core” index increased 0.2 percent, the same as in April.
THE OUTLOOK: The index measures price changes before they reach the consumer. In the past 12 months, wholesale prices are up 0.7 percent, the smallest gain since October 2009. Modest wholesale inflation reduces pressure on manufacturers and retailers to raise prices. That helps keep consumer prices stable, which boosts buying power and drives economic growth.
