WASHINGTON
Inflation at the wholesale level stayed unchanged in May as food and energy prices slipped.
The Labor Department said Tuesday its producer price index, which measures inflation before it reaches the consumer, was flat in May after a 0.5 percent monthly gain in April. Over the past 12 months, producer prices have risen 2.4 percent — with rising gasoline and natural gas costs being a key driver.
A rebound in energy prices and other commodities over the past year had been pushing producer prices higher. But the trend weakened slightly in May ahead of the Federal Reserve’s June meeting on Tuesday and today to assess the possibility of raising a key interest rate in response to the relatively strong job market.
Most analysts believe the Fed will agree to raise the federal funds rate — what banks charge each other for short-term loans. This would likely make it slightly more expensive to borrow and could dampen inflation if the rate continues to increase.
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