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US: Wholesale prices fall in May, inflation on the producer side

US: Wholesale prices fall in May, inflation on the producer side

WASHINGTON (awp/afp) – U.S. wholesale prices, a gauge of producer-side inflation, fell in May compared with April and were more than expected, particularly due to falling commodity prices, an additional positive signal for the Federal Reserve, whose meeting ends on Wednesday.

Sales prices for U.S.-made goods and services provided by U.S. firms fell 0.3% in May, according to figures released by the Labor Department on Wednesday.

The drop comes after a 0.2% rebound in the previous month, according to a consensus.

Prices of goods fell sharply, by 1.6%, while prices of services increased by 0.2%.

And year-on-year, producer-side inflation eased sharply to 1.1% from 2.3% in April.

It was a further signal that pressure on prices is easing after inflation figures were released on Tuesday, which showed a sharp slowdown.

Consumer prices actually rose 4.0% on the year versus 4.9% in April.

Another measure of inflation on the consumer side, the PCE index, will be released at the end of the month. In April, it started rising again to 4.4% over the year.

This index is favored by the US Federal Reserve (Fed), which wants to lower it to 2.0%, which is considered healthy for the economy.

The central bank holds its meeting on Tuesday and Wednesday, after which it may announce that it has not raised rates for the first time since March 2022.

These rate hikes are intended to reduce inflation by slowing economic activity.