U.S. producer prices unexpectedly fell in May as costs declined broadly, indicating inflation pressures remained benign.
The Labor Department said on Friday its producer price index for final demand slipped 0.2 percent, braking sharply from April’s 0.6 percent increase, which was the largest gain in 1-1/2 years.
Economists polled by Reuters had forecast producer prices rising 0.1 percent.
The department revamped its PPI series at the start of the year to include services and construction. The series is volatile because of big swings in prices received for trade services, making it hard to get a good read on inflation.
Wholesale prices had hinted at some pick-up in inflation pressures in recent months. But Friday’s report suggested that inflation at the factory gate remained muted.