Inflation at the producer level was up 0.5 percent for the month of May, and up 1.8 percent from a year ago. The increase was at the higher range of what was expected, and the rise was driven by 0.6 percent rise in food prices and a 1.5 percent increase in gasoline costs. The rise in food prices accounted for over sixty percent of the total increase, and it followed an 0.8 percent decline in food prices in April. Energy prices increased 1.3 percent in May and they, too, had fallen in April by 2.5 percent. Gasoline’s rise in price follows a 6.0 percent drop in April. Though the increases will, most likely, not affect Fed policy decisions, next week’s CPI report on Tuesday could have more of an impact.
