Food and gas costs push up wholesale prices, report says
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Wholesale prices in the U.S. grew last month, pushed up slightly by rising food and gas costs.
The producer price index – or changes in prices over time that U.S. producers can get for their goods -- climbed 0.5% in May compared to April, the Labor Department said Friday. That jump can be attributed to a 1.5% rise in gas costs and a 0.6% increase in food prices.
Aside from volatile gas costs, inflation in wholesale and consumer goods has only slowly edged up over the last year. That allows the Federal Reserve more flexibility in implementing strategies that could hasten the economic recovery.
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The Fed has said that as long as inflation remains low and unemployment hovers above 6.5%, it planned to keep the short-term interest rate near zero. It has also bought billions of bonds to push long-term interest rates down to spur spending and borrowing.
The slight increase in food prices last month can partly be blamed on sharp demand for eggs for the Mother’s Day and Memorial Day holidays, which drove prices up more than 40%.
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