Producer Price Index Falls 0.6%; ‘Core’ Rate Rises 0.1%

he Labor Department said Tuesday its producer price index for May fell 0.6%, while prices excluding food and energy rose 0.1%.

The level was below analysts’ forecasts of a 0.2% drop, and the so-called “core” rate excluding food and energy was projected to rise 0.2%, Bloomberg reported.

An increase in the PPI could indicate strong demand for goods, which would mean more shipments for trucking companies. However, if inflation begins to accelerate too quickly, it could also hurt the economy.

Labor said energy prices fell 3.5% in May, the biggest drop in a year, after rising 2.1% in April. Heating oil costs dropped 7.8% and gasoline prices fell 9.9%, coming off record highs in April.

Automobile prices fell 0.2% in May following a 0.5% gain. The cost of light trucks fell 0.9%, the department said.

apital equipment prices rose 0.1% in May after rising 0.2% in April. Food prices fell 0.3% following a 0.1% rise, Labor said.