Prices paid to U.S. producers unexpectedly dropped for the first time in five months, restrained by declines in fuel and food costs.
The 0.2 percent fall followed a 0.9 percent increase in May, the Labor Department said today in Washington. Core prices, which exclude food and energy, rose 0.3 percent, reflecting a jump in automobile prices. Excluding passenger cars, core prices were up 0.1 percent.
The figures, coming a day before Federal Reserve Chairman Ben S. Bernanke testifies to Congress on the economy, would be welcome news for policy makers. Central bankers last month said a pickup in inflation remained the biggest risk and more evidence of a slowdown in prices would be needed before concern eased.
From the BLS:
The Producer Price Index for Finished Goods decreased 0.2 percent in June, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This decline followed advances of 0.9 percent in May and 0.7 percent in April. At the earlier stages of processing, prices received by producers of intermediate goods rose 0.5 percent in June after increasing 1.1 percent in the prior month, and the crude goods index moved up 0.3 percent following a 2.0-percent advance in May.
According to the BLS, energy prices decreased 1.1% in June and Food prices decreased .8% in June.
However -- consider the following charts:
The Goldman Sachs Agricultural futures index:
Light Sweet Crude Oil
However, also consider that gas prices decreased in June: