1 of 2 | Prices at both the consumer and wholesale level are down sharply from peaks seen last year, giving analysts enough information to suggest Federal Reserve Chairman Jerome Powell will put a pause on rate hikes. Photo by Ken Cedeno/UPI |
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June 14 (UPI) -- Following similar trends at the consumer level, U.S. wholesale prices showed the third drop in four months as the broader economy slows down, the Labor Department reported Wednesday.
The Producer Price Index, a gauge of prices at the wholesale level, declined by 0.3% month-on-month to May. Wholesale prices increased in both January and April, but declined in February and March.
On an annual basis, wholesale prices are up 2.8% from last May. Inflation at the wholesale level was up 6.8% year-on-year to May 2022.
Much like prices at the consumer level, the Department of Labor Statistics said 60% of the decline at the wholesale level came from lower prices for gasoline. Indices for other staples such as eggs, vegetables and steel also declined.
Offsetting those were escalations in the price of things like tobacco products, electric power and beverages, offering something of a mixed outlook for eventual prices at the consumer level.
Prices for food from the grocery store remain elevated, however, at 8.3% over the 12-month period to May. On the whole, however, consumer-level prices are moderating.
The Consumer Price Index, published Tuesday, showed consumer-level prices increased 4% annually to May, a sharp decline from the 9.1% annual increase to June 2022.
So-called core inflation, which strips out volatile energy and food prices, came in at 5.3% to May, and the 0.4% month-on-month increase marks the third straight month for that level of increase.
Stock market indices were at a standstill in early Wednesday trading as investors wait for the next rate decision from the Federal Reserve. The Dow was down about a half percent as of 9:45 a.m. EDT, while the S&P 500 and the NASDAQ were relatively unchanged from Tuesday's close.