PPI Rose Less than Forecast

Bloomberg reports:

Prices paid to U.S. producers rose less than forecast in May as food expenses dropped, leading to the biggest 12-month slump in wholesale costs in a half century.
The 0.2 percent increase in prices paid to factories, farmers and other producers followed a 0.3 percent gain in April, the Labor Department said today in Washington. Excluding food and fuel, so-called core prices unexpectedly fell.
The lack of sustained gains in sales is one reason companies will need to keep a lid on prices, preventing inflation from flaring. The rising cost of commodities such as gasoline may further limit consumers’ discretionary spending at a time when the economy is showing signs of stabilizing.
“Outside of oil, inflation is still tame,” James O’Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut, said before the report. “Given the huge amount of slack in the economy, the broad trend in inflation is more likely to be down than up.”
Economists forecast producer prices would rise 0.6 percent, according to the median of 73 projections in a Bloomberg News survey. Estimates ranged from no change to a 2.3 percent gain.
Compared with a year earlier, companies paid 5 percent less for goods, the biggest decrease since 1949 and reflecting the drop in fuel costs late last year that has since partially reversed.

Meanwhile, Job title inflation reaches alarming levels.

Posted by on June 16th, 2009 at 9:10 am


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