U.S. wholesale prices rose in May at the slowest pace in 10 months as the cost of food fell and the increase in energy prices tapered off, the government reported Tuesday.Over the longer term, easy money policy sure is working at the producer price level with finished goods increasing 7.3% year over year, the highest level since September 2008. One issue is that the easy money isn't feeding into demand / price increases for labor (likely because it is so focused at the producer levels, rather than the consumer level where corporations can pass on price increases) so the below acts as an added tax on goods used as inputs.
The producer price index rose 0.2% last month, the Labor Department said. It was the smallest gain since July 2010.
Food costs dropped 1.4%, owing mainly to lower vegetable prices, to mark the biggest one-month decline in almost a year. The price of food has fallen twice in the past three months, although food costs are still 3.9% higher compared to one year ago.
Energy prices, meanwhile, rose 1.5% in May, the slowest rate since September. A surge in fuel costs have push wholesale prices sharply higher since last fall, but oil prices have pulled back over the past month. Many economists expect the modest decline in oil prices to ease pressure on wholesale costs.