Wholesale Prices See Biggest Drop in Year(but CORE is up 0.2 as expected)

[papau]

http://story.news.yahoo.com/news?tmpl=story&ncid=716&e=5&u=/ap/20040715/ap_on_bi_go_ec_fi/economy

Wholesale Prices See Biggest Drop in Year

By JEANNINE AVERSA, Associated Press Writer

WASHINGTON - Wholesale prices fell by 0.3 percent in June, the biggest decline in a year, as energy and food costs retreated. The report underscored Federal Reserve policy-makers' belief that inflation isn't currently a threat to the economic recovery.

The unexpected over-the-month drop in the Producer Price Index (news - web sites), which measures the prices of goods before they reach store shelves, comes after wholesale costs shot up in the prior two months. It reflected sharply higher prices for energy and food, the Labor Department (news - web sites) reported Thursday. Wholesale prices rose by 0.7 percent in April and by 0.8 percent in May. <snip>

On the inflation front, "core" wholesale prices — which exclude volatile energy and food prices — rose by a modest 0.2 percent in June, down from a 0.3 percent advance in May. The increase in core prices matched economists' expectations. <snip>

In the first six months of this year, wholesale prices have gone up at a seasonally adjusted annual rate of 5 percent, compared with a 3 percent pace for the same period last year. Core prices, meanwhile, have increased at a 2.5 percent rate so far this year, compared with a 1.2 percent rise for the corresponding period last year.

[papau]

1. Reuters: Producer Prices Fall as Gasoline Plummets - CPI is out

tomorrow - should be interesting.

Why is it that I trust the Reuter Headline makers more than the AP?

:-)

http://story.news.yahoo.com/news?tmpl=story&cid=568&ncid=749&e=3&u=/nm/20040715/bs_nm/economy_prices_dc

Producer Prices Fall as Gasoline Plummets

WASHINGTON (Reuters) - U.S. producer prices shrank unexpectedly last month, government data released on Thursday showed, after prices for energy goods fell back sharply in news that will sooth concerns over inflation.