US producer prices rose just 0.2 per cent last month as food costs fell, but prices outside of food and energy rose a steeper-than-expected 0.3 per cent, a government report showed today.
The rise in the overall producer price index came in below the 0.4 per cent expected on Wall Street, but economists had seen the core rate advancing just 0.2 per cent.
Despite the stiffer-than-expected monthly rise in producer prices outside of food and energy, the 12-month gain held steady at the 1.5 per cent increase seen in April, which could help temper inflation concerns.
The labour department said energy costs rose 0.4 per cent in May, a much slower pace of advance than in March or April, when they rose 1.8 per cent and 4 per cent, respectively.
The report showed prices for capital goods rose more quickly than for nonfood, non-energy consumer goods. Capital equipment prices were up 0.3 per cent last month, while core consumer goods prices rose just 0.2 per cent. Pharmaceutical prices shot up 1.9 per cent, the cost of heavy trucks rose 1.4 per cent and communication equipment costs advanced 0.4 per cent.
Car prices, however, dropped 0.4 per cent. Intermediate goods prices rose 1.1 per cent, both overall and excluding food and energy, while crude goods prices rose 2 per cent. Core crude goods prices climbed 6.2 per cent.