U.S. Producer Prices Fall 0.2% in May; Price Pressures Remain Tame Amid Subdued Economic Growth
WASHINGTON--A gauge of U.S. inflation ticked lower last month, a sign that price pressures remain tame amid subdued economic growth and one that could ease concern from central bankers.</br></br>The producer-price index for final demand, which measures changes in the prices firms receive for their goods and services, fell a seasonally adjusted 0.2% in May from a month earlier, the Labor Department said Friday. Economists surveyed by The Wall Street Journal had forecast a 0.2% rise in prices. Producer prices were up 2% from a year ago.</br></br>May's report showed inflationary pressures abruptly falling off after building in March and April. May prices for food, energy and the trade services all fell from the prior month. A gauge that excludes these volatile components was unchanged, an indication of broad-based weakness in prices.</br></br>Lindsey Piegza, chief economist at Sterne Agee, said the data should "ease concerns" among some Federal Reserve officials that inflation was gathering steam. "A potential catalyst for a change in monetary policy, inflationary pressures reported in April, appear to be short-lived," Ms. Piegza said.</br></br>Other economists cautioned against reading too much into one month of data from a report that has been giving volatile readings since its methodology was changed in January. Cooper Howes, economist at Barclays, said the producer-price index is likely "taking pause after moving steadily higher in recent months. We expect it to gradually trend upward."