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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. The decrease exceeded the lowest estimate of economists surveyed by Bloomberg. Over the past 12 months, wholesale prices fell 1.3 percent, the most in records dating back to 2010.
Businesses have seen muted wholesale costs as a plunge in energy prices in the second half of 2014 and a stronger dollar boosted by subdued growth abroad limit inflation early in the pipeline. 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. Projections ranged from a drop of 0.2 percent to a 0.4 percent advance.
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.
more:
http://www.bloomberg.com/news/articles/2015-05-14/wholesale-u-s-prices-unexpectedly-drop-in-broad-based-retreat
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