In a surprising twist, wholesale prices fell 0.2% in May, hinting that inflation may be easing its grip.
The Producer Price Index (PPI), a barometer of what producers fetch for goods and services, slipped last month, reversing April’s 0.5% uptick, the Labor Department’s Bureau of Labor Statistics reported Thursday.
Analysts had expected a modest 0.1% rise, according to Dow Jones.
Stripping out food, energy, and trade services, the core PPI stayed flat, defying forecasts of a 0.3% increase.
On a yearly basis, the all-items PPI nudged up 2.2%.
Stock futures ticked higher post-report, while Treasury yields dipped. This data follows the BLS’s announcement that the consumer price index, a key gauge of consumer inflation, was unchanged from April.
Wholesale prices were curbed by a 0.8% drop in final demand goods, the sharpest fall since October 2023, with the energy index plunging 4.8%. Food prices edged down 0.1%.
In services, fuels and lubricants retail margins spiked 12.2%, though a 4.3% drop in airline passenger services tempered the rise.
This report comes a day after the Federal Reserve noted “modest further progress” toward its 2% inflation target but stopped short of hinting at interest rate cuts.
The Fed has kept its benchmark rate at 5.25%-5.5% since July 2023, waiting for clearer signs that inflation is on track.
In other news, the Labor Department revealed initial unemployment claims surged to 242,000 for the week ending June 8, the highest since August 2023 and up 13,000 from the previous week.
Economists had expected 225,000. Continuing claims, trailing by a week, reached 1.82 million, up 30,000 from the prior week.
