Underlying U.S. producer prices increased solidly for a second straight month in...
WASHINGTON - Underlying U.S. producer prices increased solidly for a second straight month in May, boosted by a surge in the cost of hotel accommodation and gains in portfolio management service fees.
“There is no evidence of falling inflation in this report,” said John Ryding, chief economist at RDQ Economics in New York. Economists polled by Reuters had forecast the PPI would nudge up 0.1% in May and rise 2.0% on a year-on-year basis. A tariff on all goods from Mexico to force authorities in that country to curb migrants, mostly from Central America, from crossing the border into the United States was narrowly averted after the two nations struck an agreement late on Friday.
The dollar was flat against a basket of currencies, while U.S. Treasury prices fell. Stocks on Wall Street were trading higher.The services-led increase in the core PPI last month is likely to translate into a slightly higher reading for other underlying inflation measures in May. According to a Reuters survey of economists, core consumer prices probably increased 0.2% last month after nudging up 0.1% in April. The consumer price data will be published on Wednesday.
Portfolio management service fees, identified by the Fed’s Powell as one of the transitory factors restraining inflation, rose 1.8% in May after surging 5.3% in April. These prices, which are being supported by a rebound in the stock market, are likely to lift the core PCE price index in May. The cost of passenger transportation services also increased last month.
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