U.S. wholesale prices drop 0.1% in April

09:12, May 19, 2010      

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U.S. wholesale prices declined by 0.1 percent in April, smaller than the economists' expectation, the Labor Department reported Tuesday.

The decline in the department's Producer Price Index (PPI), a measure of inflation at the wholesale level, followed a 0.7 percent gain in March. Economists had forecasted a 0.2 percent drop.

Excluding the volatile food and energy sectors, core wholesale prices rose by 0.2 percent in April, matching the economists' expectation.

Over the past 12 months ended April 2010, wholesale prices are up 5.5 percent.

Economists believe that inflation remains not a problem at the moment and is not likely to become a threat any time soon because of all the downward pressures on wages and prices as a result of the recession.

They also believe that the subdued inflation pressure gives the Federal Reserve room to keep interest rates low to boost the recovery.



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