U.S. wholesale prices climb 0.1% in June
WASHINGTON (MarketWatch) -- U.S. wholesale prices rose slightly in June as higher costs of food, trucks and appliances offset another decline in energy costs, the Labor Department said Friday.
The producer price index rose a seasonally adjusted 0.1% last month, the Labor Department said Friday. Economists surveyed by MarketWatch had predicted a 0.2% decline.
Meat prices pushed up the food index by 0.5% last month, the biggest increase since last November. Fresh and dry vegetables were also more costly.
Energy costs, however, fell again -- the fourth straight month decline -- as the cost of electric power, home heating oil, diesel and propane all declined. The energy index dropped 0.9%.
The lower cost of fuel is a plus for the economy at large, giving consumers more money to save or spend on other things. Energy is a major household cost.
Backing out volatile food and energy inputs, "core" wholesale prices rose 0.2% last month to match the MarketWatch forecast. The core index is viewed by the Federal Reserve as a more accurate gauge of inflationary pressures.
"The modest 0.1% increase in U.S. producer prices in June is another illustration that the Fed doesn't need to worry about inflation, at least not in the near-term," said Paul Ashworth, U.S. economist at Capital Economics.
The price of light trucks such as residential flat-beds jumped 1.4% in June, while appliances rose 1.1% and pet food leaped 4.5% -- the biggest increase in four years.
Over the past 12 months, the core index has risen an unadjusted 2.6%.
Overall wholesale prices, however, have risen at a much smaller 0.7% pace. Just one year ago, the 12-month rate stood at a much higher 7.0%.
Lower wholesale rates reduce the cost of business for companies that sell directly to end users and eases the pressure on them to raise prices for consumers.