The rising fuel costs boosted US producer prices for the second straight month in May.
The producer price index climbed 0.4 percent from 0.2 percent recorded in April, according to the U.S. Bureau of Labor Statistics report on Wednesday. Prices declined for the first time in seven months, except for volatile components such as food, energy and trade services.
The lingering effect of the prior drop in the energy sector and the stronger dollar after the poor job report 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 on Wednesday to discuss interest rates.
“Prices are still well contained,” Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, said before the report. “The core should also remain well contained as demand is relatively moderate.”
The median forecast of 66 economists called for a 0.3 percent rise, with projections ranging from little change to an advance of 0.6 percent.
Costs fell 0.1 percent over the past 12 months after being little changed.
Food prices surged 0.3 percent and energy expenses rose 2.8 percent, the most since the second quarter of 2015.
