Wholesale Prices Increase Less Than Expected

Washington, DC, June 16, 2009--Wholesale prices rose slightly in May, the government said Tuesday, but the increase was less than expected and the 5% annual rate of decline was the sharpest since 1949.

The Producer Price Index, which tracks the changes in selling prices for domestic producers, rose by 0.2% last month.

A consensus estimate of economists had forecast a 0.6% increase.

The jump in wholesale prices follows a 0.3% increase in the index in April. January's 0.8% increase snapped a five-month streak of falling prices.

Inflation and deflation: Year-over-year, wholesale prices fell 5%, the largest decline in 60 years.

"That continues to show that even further back in the pipeline we don't have inflation risk," Khan said.

A 2.9% increase in energy goods prices offset a 1.6% decline in consumer foods, the report said. That's due in large part to gasoline prices, which rose 13.9% following a 2.6% increase in April.