The numbers: The wholesale cost of U.S. goods and services rebounded in May after three straight monthly declines, the Labor Department said Thursday. The producer price index rose 0.4% in May after a record 1.3% decline in the prior month. Economists polled by MarketWatch has predicted a 0.1% gain.
The rate of wholesale inflation in the past year was a negative 0.8% in May, up slightly from a negative 1.2% in the prior month.
What happened: Food and energy costs increased in May. Energy costs rose 4.5% after three straight declines. Food prices gained 6% last month
Stripping out food and energy, another measure of wholesale inflation known as core PPI rose 0.1% last month. The 12-month core rate slipped to negative 0.4% from negative 0.3% in April.
Big picture: Economists were expecting the rebound in energy prices in May. But other prices were a bit firmer than expected. Still, with the 12-month readings in negative territory, the report fits with the lack-of-inflation theme in the consumer price data released Thursday.
What are they saying? “The stronger-than-expected rise in producer prices in May suggests that the worst of the disinflationary impulse from the coronavirus crisis is likely behind us,” Lydia Boussour, senior U.S. economist at Oxford Economics.
Market reaction: Futures for the Dow Industrials and the S&P 500 index were sharply lower on Thursday. Investors are worried about rising coronavirus cases and a grim outlook from Fed Chairman Jerome Powell. U.S. stocks DJIA, -6.89% SPX, -5.89% are trading well above their March lows after the coronavirus pandemic forced the shutdown of businesses.
