Small Rise Seen for Price Index

Price statistics being released this week will probably show inflation is tame, giving more reason for the Federal Reserve to skip a June increase in interest rates, analysts said. The producer price index, which tracks prices paid to factories, farmers and other suppliers of goods, is likely to have risen 0.2% in May after falling 0.3% during April, according to analysts in a Bloomberg News survey. The Labor Department will release the report Friday. The core PPI, which excludes food and energy costs, probably rose 0.1% in May, as it did in April, analysts said. Fed policymakers “have the opportunity to sit back and wait,” said Joel L. Naroff, president of Naroff Economic Advisors Inc. in Holland, Penn. Unemployment rose to 4.1% in May and growth in manufacturing cooled, according to private and government figures released last week. The Fed’s policy panel--the Federal Open Market Committee--next meets June 28. The central bank has raised the overnight bank lending rate six times in 11 months to keep inflation in check.

Worker productivity probably grew at a 2.4% annual rate in the first quarter, analysts said, predicting no change in the Labor Department’s initial estimate last month. The revised numbers are to be released Tuesday. Unit labor costs, meanwhile, probably rose 1.8%, also the same as the previous report, analysts said. Another Labor Department report, set for release Thursday, will probably show import prices increased 0.8% in May after falling 1.6% during April, analysts said. The Federal Reserve will probably report growth in consumer borrowing slowed in April, rising $7.5 billion for the month after climbing $9.1 billion during March, analysts said. The Fed will release that report Wednesday. Also on the agenda, inventories at U.S. wholesalers probably increased 0.5% in April after rising 0.7% during March, analysts said. The Commerce Department is scheduled to release the statistics Tuesday.