Investing.com - Producer price inflation in the U.S. rose more than expected in May, placing pressure on the Federal Reserve’s price stability mandate, according to official data released on Wednesday.
Producer prices rose by a seasonally adjusted 0.4% last month the Commerce Department said, against forecasts for the 0.1% increase to remain at the levels seen in April.
The producer price index was down 0.1% from a year earlier, in line with expectations and compared to lack of change seen the prior month. That was its first annual decline since October, suggesting that inflation may not be rising.
The core producer price index, that excludes food and energy, also rose 0.3% last month, above forecasts for a 0.1% increase which would have been in line with April’s read.
Core producer prices rose at an annualized rate of 1.2% last month, above expectations for 1.0% advance and compared to the prior gain of 0.9%.
Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories.
After the report, which was released simultaneously with the NY Empire State manufacturing index, EUR/USD was trading at 1.1235 from around 1.1231 ahead of the release of the data, GBP/USD was at 1.4187 from 1.4197 earlier, while USD/JPY was at 106.15 from 106.17 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 94.82, compared to 94.84 ahead of the report.
Meanwhile, U.S. stock futures pointed to a higher open. The Dow futures gained 47 points, or 0.27%, the S&P 500 futures rose 5 points, or 0.23%, while the Nasdaq 100 futures advanced 10 points, or 0.23%.
Elsewhere, in the commodities market, gold futures traded at $1,285.35 a troy ounce, compared to $1,284.65 ahead of the data, while crude oil traded at $47.95 a barrel from $47.92 earlier.