Wholesale Prices Fall by Record 1.9% in April

U.S. wholesale prices fell 1.9% in April, the most on record, as costs declined for energy and motor vehicles, the Labor Department said Thursday.

In other economic news, the Commerce Department said inventories at retailers, manufacturers and wholesalers rose 0.4% in March, and Labor said fewer U.S. workers filed new claims for unemployment benefits, but it remained above a key level for the 13th straight week.

The 1.9% decrease in prices paid to U.S. factories, farmers and other producers followed a 1.5% rise in March and was more than double economists' forecast, Bloomberg said.

Excluding the volatile food and energy sectors, the “core” index, fell 0.9%, the most since August 1993.

A weak stretch of economic growth has put pressure on companies to reduce prices to spark demand, analysts told Bloomberg. Low demand for goods often means fewer shipments for truckers.

A decline in prices would make it difficult to speed up the pace of the economy because companies may be less inclined to expand and consumers, expecting cheaper goods and services in the future, may wait to make purchases, Bloomberg said.

However, Commerce's report on business inventories found that business sales surged 1.8%, the largest jump since April 2002. Reuters said this is signal businesses may need to order supplies to meet demand, which would be good for trucking.

tocks at retailers rose 0.8%, while inventories at manufacturers were unchanged.

The stocks-to-sales ratio -- the amount of time it would take to deplete inventories at the current sales pace -- fell to 1.38 months from 1.40 months in February.

The producer price index report found that energy prices fell 8.6% in April, Commerce said, the most since July 1986, due to record decline in gasoline and heating oil. Prices for gasoline fell 22.3%.

So far this year, producer prices are rising at a 6.6% annual rate, compared with a 2.9% pace in the same three months last year, reflecting higher energy costs earlier in 2003. The core PPI is rising at a 0.8% rate, compared with a 0.2% rate of decrease last year.

Labor said first-time filings for unemployment aid dipped 13,000 in the week ended May 10 to 417,000, from a revised 430,000.

Last week was the 13th straight week claims were above the key 400,000 level, which indicates a stagnant labor market, the Associated Press said.

The latest drop brought the four-week moving average down by 7,500 to 439,750, its lowest level in a month.