WASHINGTON (dpa-AFX) - After reporting an unexpected decrease by U.S. producer prices in the previous month, the Labor Department released a report Thursday showing producer prices crept slightly higher in the month of May.
The Labor Department said its producer price index for final demand inched up by 0.1 percent after slipping by a revised 0.2 percent in April.
Economists had expected producer prices to rise by 0.3 percent compared to the 0.4 percent decline originally reported for the previous month.
Meanwhile, the report said the annual rate of growth by producer prices accelerated to 2.6 percent in May from 2.5 percent in April, in line with economist estimates.
The Labor Department said the monthly uptick by producer prices was led by prices for services, which edged up by 0.1 percent in May after falling by 0.4 percent in April.
Prices for trade services climbed by 0.4 percent, while prices for transportation and warehousing services dipped by 0.2 percent and prices for other services were unchanged.
The report also said core producer prices, which exclude prices for food, energy and trade services, inched up by 0.1 percent in May after edging down by 0.1 percent in April.
The annual rate of growth by core producer prices slowed to 2.7 percent in May from 2.9 percent in April.
'For the second day in a row, inflation data came in lower than expected and this gives the Fed room to sit on their hands,' said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.
He added, 'As long as inflation isn't increasing - or even better, is decreasing - the Fed can be patient and wait for more information on how the new tariffs and trade negotiations are going to impact the price stability part of their dual mandate later this year.'
A separate report released by the Labor Department on Wednesday showed a slight increase by consumer prices in the U.S. in the month of May.
The Labor Department said its consumer price index inched up by 0.1 percent in May after rising by 0.2 percent in April. Economists had expected another 0.2 percent increase.
Meanwhile, the report said the annual rate of consumer price growth accelerated to 2.4 percent in May from 2.3 percent in April. The annual rate of consumer price growth was expected to speed up to 2.5 percent.
Excluding food and energy prices, core consumer prices still crept up by 0.1 percent in May after edging up by 0.2 percent in April. Economists had expected core consumer prices to rise by another 0.2 percent.
The annual rate of core consumer price growth in May was unchanged from the previous month at 2.8 percent, while economists had expected the annual rate of core consumer price growth to accelerate to 2.9 percent.
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