U.S. Wholesale Prices Rise Sharply in May
A rise in food and gas costs drove a measure of wholesale prices up sharply in May. But outside those volatile categories, inflation was mild.
A rise in food and gas costs drove a measure of wholesale prices up sharply in May. But outside those volatile categories, inflation was mild.
U.S. wholesale prices rose only slightly in January after three straight declines, the latest sign that inflation is posing no threat. It means the Federal Reserve has room to keep interest rates at record lows without worrying about igniting inflation.
Markets were subdued Wednesday ahead of a run of U.S. economic news that should provide a clearer steer on the state of the world's largest economy and what further steps the Federal Reserve might take in the months ahead.
A steep drop in gasoline costs drove down a measure of U.S. wholesale prices in May by 1%, the most since July 2009. But outside the food and energy categories, prices increased moderately.
The inflation bells are ringing. You've seen the jump in prices at the grocery store, and, maybe more significantly, at the gas pump. But are these price hikes a sign that inflation is about to take off, or are they just temporary increases?
Federal economic data, as well as the Labor Department's Producer Price Index and Consumer Price Index, could dominate economic news this week. And while the earnings season is winding down, quarterly reports from Nike and Ross Stores are scheduled.
Inflation has inched higher in the past six months, but that's not a danger sign, but rather a harbinger of improving economic conditions and a strengthening recovery. And that, in turn, should lead to higher wages and more hiring in the year ahead.
Inflation in 2010 was low, according to the consumer price index. But underlying growth in the cost of energy, raw materials and health care could indicate significant inflation this year. And that could mean higher prices for consumers or lower profits for companies.
Wholesale prices in December posted their biggest increase in nearly a year, lifted by more expensive energy and food costs. But most other prices were largely well behaved, suggesting inflation isn't spreading through the economy.
Led by a jump in energy, producer prices rose 0.8% in November -- a gain that suggests policymakers may be winning their battle to avoid deflation. It's the straight monthly rise. However, minus energy and food increases, inflation pretty much vanishes.
Expect your T-shirts to get a little bit thinner next year -- and maybe a little more expensive. Apparel retailers are looking high and low for ways to keep from passing on too much of their own rising costs to consumers. The trick: Doing so without hurting quality.
Producer prices rose less than expected, with much of the hike coming from energy. Excluding food and energy, PPI fell 0.6% in the month. Overall, wholesale prices are up just 1.5% in the past year -- still too close to deflation for the U.S. Federal Reserve.
Producer prices rose a higher-than-expected 0.4% in September, but the core rate rose just 0.1%, the Labor Department said. The price increases point to a low-inflation environment, easing concerns that the world%u2019s largest economy will lapse into a dangerous deflationary spiral.
Producer prices rose a slightly higher-than-expected 0.4% in August, but the core rate, which excludes food and energy, rose just 0.1%, the Labor Department said. The rises point to a low-inflation environment for the U.S. economy, easing concern that the world%u2019s largest economy will lapse into an unwanted period of deflation.
Investors spooked by deflation and a possible double dip could be adding much more risk in buying Treasurys at current prices than they realize. And some shrewd investors have been exiting Treasurys.
The producer price index rose less than expected in July, but with the core level rising a higher-than-expected 0.3%. Low inflation -- not delfation -- is probably just what the U.S. Federal Reserve wants at this stage of the recovery.
The producer price index fell 0.5% in June, more than expected. Along with manufacturing data out Thursday, the price data give more support to analysts who are worried that deflation remains the biggest threat to the economy.
U.S. wholesale prices fell a seasonally adjusted 0.5% in June -- the biggest decline since February -- led by lower food and energy prices, the Labor Department reported Thursday. This follows a 0.3% decline in May, indicating that so far, the government's economic stimulus efforts haven't sparked inflation.
May's 0.3% slide in the producer price index confirmed that low-inflation conditions continue in the U.S. economy. A sudden jump is always possible due to a surge in oil prices, but for now, deflation is the greater risk.
More than a year into the U.S.%u2019s record fiscal stimulus, there%u2019s still little sign of inflation, as producer prices unexpectedly fell 0.1% in April.
More good news for businesses: inflation remains under control at the wholesale level, as producer prices plummeted 0.6% in February. The core rate, which excludes food and energy, rose just 0.1%.
Producer prices rose just 0.2% in December to close out a year of low inflation at the wholesale level, something that will help the Fed maintain its low interest rate policy as it seeks to stimulate an economic recovery in the U.S.
The PPI surged a surprising 1.8 percent. Excluding the often-volatile food and energy component, "core" producer prices rose 0.5 percent. Both measures exceeded expectations of 1 percent and 0.2 percent, respectively. The New York State manufacturing index also surprised by dropping sharply.


























