U.S. producer prices increased by 0.1% in May, less than the 0.2% rise economists had expected, according to the Labor Department’s Bureau of Labor Statistics.
This small gain follows a revised 0.2% drop in April. Over the past year, the producer price index (PPI) rose 2.6%, slightly higher than April’s 2.5% increase.
The modest rise was held back by lower costs in some services, especially airfares, which fell 1.1%. Meanwhile, prices for goods like tobacco, gasoline, roasted coffee, and natural gas saw increases. Wholesale vehicle and machinery margins also rose sharply by 2.9%.
The core PPI, which excludes food and energy, rose 0.1% in May, missing the 0.3% forecast. On a yearly basis, core PPI increased 3.0%, slightly below the expected 3.1%.
Recent consumer price data showed similar trends, with inflation easing due to cheaper gasoline and airfares. However, economists warn inflation could pick up later this year as tariff-related price increases work through the economy.
The Federal Reserve is expected to keep interest rates steady at its upcoming meeting but may resume rate cuts in September if inflation continues to ease.
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