May Producer Price Index

The May Producer Price Index, commonly seen as a measure of inflation at the wholesale level, rose +0.2%, well short of consensus expectations. The primary influences on this month’s report were a substantial drop in food prices which partially offset a stronger hike in energy costs. The PPI has now fallen at a -4.7% rate year over year. The core measure, which excludes the influences from both food and energy, actually fell -0.1%, helping bring its year over year rate down -0.4% to a still strong +3.0%. While persistently high at the core, the downward trend of the headline number encourages us here at Atlas to expect inflation will continue to moderate, at least for the near future.