Falling food and energy prices helped keep US wholesale inflation flat in May, in another sign of slackening price pressures, the Labor Department reported Tuesday.
The new figures come as the US central bank begins a two-day monetary policy meeting, with the Federal Reserve widely expected to raise the key interest rate for the second time this year despite signs of a cooling economy.
Policymakers said last month they believed the weakness in the economy likely was “transitory” and a rate hike would be appropriate “soon,” although they also promised to wait for confirmation the recovery has resumed before increasing the benchmark lending rate.
The Producer Price Index, which measures input costs from the seller’s perspective, was unchanged in May, down sharply from April’s 0.5 percent jump.
For the latest 12 months, PPI was up 2.4 percent, down a tenth of a percentage point from last month’s reading.
However, the cost of services was persistent sign of rising prices, rising 2.1 percent compared to May 2016, the largest increase in two and a half years.
Excluding the more volatile categories food, fuel and trade, PPI slipped 0.1 percent for the month, and the 12-month rate was up 2.1 percent, unchanged from last month.
Energy prices continued to see sharp declines, with gasoline prices plunging 11.2 percent, the largest drop since February 2016, while jet fuel costs fell 11 percent, the biggest decline since January of last year.
Guestroom rentals saw the biggest monthly decline since the Labor Department began tracking them in 2009, falling 5.2 percent for the month.
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