Wholesale U.S. Prices Showed Broad-Based Retreat in April

14 May 2015 | Author: | No comments yet »

Wholesale U.S. Prices Showed Broad-Based Retreat in April.

Wholesale prices in the U.S. unexpectedly declined in April from the prior month, indicating inflation is well-contained as Federal Reserve officials weigh when to raise the benchmark interest rate.

The 0.4 percent drop in the producer-price index followed a 0.2 percent gain in March that was the first increase in five months, a Labor Department report showed today in Washington. Fed officials are looking for signs that price growth will rise toward their goal as they consider raising rates for the first time in nine years. “Inflation is still very tame,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York, whose forecast for an unchanged reading was among the closest in the Bloomberg survey. “If anything, it’s a little weaker.” The median estimate in a Bloomberg survey of 74 economists called for a 0.1 percent increase.

Another report today showed fewer Americans than forecast filed applications for unemployment benefits last week, pushing the average over the past month to the lowest level in 15 years and underscoring labor-market strength. The personal consumption expenditures index, the Fed’s preferred inflation gauge, rose 0.3 percent in March from a year earlier and has been below the Federal Reserve’s 2 percent goal since May 2012.

A report Wednesday showed the cost of imported goods fell 0.3 percent last month, marking the 10th straight decline as the dollar rose overseas economies cooled.

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