Wholesale price increases fell in May, according to the Associated Press, in the latest sign that inflation pressures in the United States may be easing as the Federal Reserve considers a timetable for cutting interest rates.
The Labor Department reported today that its producer price index — which tracks inflation before it reaches consumers — declined 0.2% from April to May after rising 0.5% the month before. Measured from a year earlier, wholesale prices were up 2.2% in May. Excluding volatile food and energy prices, so-called “core” producer prices were unchanged from April and up 2.3% from May 2023.
The producer price index can provide an early read on where consumer inflation is headed. Economists also watch it because some of its components, including some health care and financial services costs, are used to compile the Fed’s preferred inflation gauge, known as the personal consumption expenditures price index.
Combined with Wednesday’s milder consumer inflation report, Thursday’s wholesale data offered an encouraging sign that an acceleration of prices that occurred early this year may have passed.
