A measure of wholesale prices fell unexpectedly in May, adding further evidence of declining inflation.
The Labor Department's Bureau of Labor Statistics reported Thursday that the producer price index, a measure of the prices producers receive for their goods and services on the open market, fell 0.2% during the month. This reflected a 0.5% increase in April and compared with Dow Jones estimates for a 0.1% rise.
Excluding food, energy and business services, the producer price index remained unchanged, compared with expectations for an increase of 0.3%.
On an annual basis, the producer price index for all items rose by 2.2%.
Stock market futures saw some modest gains after the report while Treasury yields fell.
The release comes one day after the Bureau of Labor Statistics announced that the Consumer Price Index, a widely watched measure of inflation that measures what consumers actually pay for goods and services, was unchanged during the month.
From a wholesale perspective, the Producer Price Index was affected by a 0.8% decline in prices for final demand goods, the largest decline since October 2023. Within this category, the energy index fell by 4.8%. Food prices decreased by 0.1%.
On the services side, fuel and lubricants retail margins rose 12.2%, but this was partially offset by a 4.3% decline in passenger services prices.
The release comes a day after the Federal Reserve noted “modest additional progress” in lowering inflation to its 2% target, but not enough for the central bank to start lowering interest rates. The Fed has kept its benchmark borrowing rate in a target range of 5.25% to 5.5% since July 2023, as it waits for more evidence that inflation is heading back toward the central bank's 2% target.
In other economic news Thursday, the Labor Department reported that initial claims for unemployment insurance jumped to 242,000 for the week ending June 8. This is the highest level since August 2023 and an increase of 13,000 from the previous period. Economists surveyed by Dow Jones were looking for 225,000.
Continuing claims, which were delayed by a week, totaled 1.82 million, up 30,000 from the previous week.
