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U.S. producer prices rise
on gasoline; underlying inflation weak
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 [June 15, 2016]
WASHINGTON, June 15 (Reuters) - -
U.S. producer prices rose for a second straight month in May as the cost
of energy products and services increased, but the lingering effects of
a strong dollar and lower energy prices will likely keep inflation tame
for a while.
The Labor Department said on Wednesday its producer price index for
final demand increased 0.4 percent last month after rising 0.2
percent in April. In the 12 months through May, the PPI slipped 0.1
percent after being unchanged in April.
Economists polled by Reuters had forecast the PPI gaining 0.3
percent last month and slipping 0.1 percent from a year ago.
A surge in the dollar and the plunge in oil prices between June 2014
and December 2015 have dampened price pressures, keeping inflation
below the Federal Reserve's 2 percent target.
Although the dollar has dropped 1.5 percent against the currencies
of the United States' main trading partners this year and oil prices
are near $50 per barrel, underlying inflation remains benign.
Last month, energy prices jumped 2.8 percent after increasing 0.2
percent in April. Energy prices accounted for two-thirds of the 0.7
percent rise in the cost of goods last month.
Prices for services rose 0.2 percent after inching up 0.1 percent in
April. The increase reflected an increase in margins received by
wholesalers and retailers.
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A man unloads vegetables at Grand Central Market in Los Angeles,
California, March 9, 2015. REUTERS/Lucy Nicholson
A key measure of underlying producer price pressures that excludes food, energy
and trade services dipped 0.1 percent last month after rising 0.3 percent in
April.
The so-called core PPI was up 0.8 percent in the 12 months through May. The core
PPI increased 0.9 percent in April.
(Reporting by Lucia Mutikani; Editing by Paul Simao) ((Lucia.Mutikani@thomsonreuters.com;
1 202 898 8315; Reuters Messaging: lucia.mutikani.thomsonreuters.com@reuters.net)
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