In Turnaround, May Wholesale Prices Edge Up

Wholesale prices rose a modest 0.3% in May, ending a string of three consecutive monthly declines that had compensated for a huge 1.9% increase in January, when cold weather sent food and energy prices soaring, the Labor Department reported Thursday.

Indeed, the May report showed energy prices declining 1%, continuing a correction since last winter, while food prices rose 0.6%. Excluding food and energy, inflation for finished goods at what many economists believe is the true, or “core,” rate was 0.2%--precisely where that measure has been for three of the last five months and five of the last nine.

“These inflation numbers are back on trend after last winter’s surge and the reaction to it,” said Donald Ratajczak of the economic forecasting project at Georgia State University in Atlanta, which specializes in price movements. “Numbers like this will probably continue out for the rest of the year. In general, it’s calm inflation out there.”

“It’s a plain vanilla report and plain vanilla tastes good in this case,” said Ron Schreibman, vice president of the National Assn. of Wholesaler-Distributors. He noted that the winter inflationary scare is long gone, with prices by now firmly settled in a moderate path.

After surging at double-digit annual rates as the year began, inflation as measured by the producer price index has settled down to an annual rate of 4% so far this year.