Washington, U.S. wholesale prices rose slightly in April, limited by a significant decline in food costs, the government reported Wednesday.
The Labor Department said its producer price index (PPI), which measures inflation pressures before they reach consumers, advanced 0.1 percent in April following a 0.3 percent increase the previous month. It was the smallest gain since wholesale prices were flat in December.
In April, food costs plunged 1.1 percent, the biggest drop since a 1.3 percent fall in mid-2016. Energy costs, which had declined for two consecutive months, increased 0.1 percent despite gasoline costs dropping 0.4 percent.
Core PPI, which excludes volatile energy and food costs, rose 0.2 percent last month. Over the past 12 months, overall wholesale prices are up 2.6 percent while core wholesale prices have risen 2.3 percent.
Many economists are concerned that inflation, after years at chronically low levels, could move past the 2 percent pace to levels that would indicate unwanted inflation pressures are starting to build. They note that the Trump administration's announcement Tuesday that it was re-imposing sanctions on Iran could cause a spike in oil prices at a time when low U.S. unemployment could trigger rising wage pressures.
Other economists, however, believe that other forces will combine to keep inflation rising at modest levels and allow the U.S. Federal Reserve (Fed) to continue its gradual pace of interest-rate increases. The central bank is widely expected to raise interest rates for a second time this year in June and could lift rates a total of three or perhaps four times this year.
Source: Saudi Press Agency