Wholesale inflation up less than expected in May - WAOW - Newsline 9, Wausau News, Weather, Sports

Wholesale inflation up less than expected in May


WASHINGTON (AP) -- Wholesale prices rose less than expected in May as a large jump in the price of gasoline offset a drop in food costs.

The Labor Department says the Producer Price Index increased by a seasonally adjusted 0.2 percent from April. That's below analysts' expectations of a 0.6 percent rise.

The department also says wholesale prices fell 5 percent over the past 12 months, the largest annual drop in almost 50 years.

Falling prices can raise fears about deflation, a destabilizing period of extended price declines. But most economists believe efforts by the Federal Reserve to combat the recession will prevent that from happening.

Online Reporter: Donnie Forti

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