Producer Price Index for final demand declined 0.2% in May after rising 0.6% in April, the Labor Department said today in Washington.
The increase in April was the largest in eighteen months and prices declined after rising for four months in a row.
The producer prices declined unexpectedly and the series has been volatile in recent years. The department restructured its PPI series at the beginning of the year to expand to services and construction.
The report on Friday suggests that the price increase are moderating but labor markets are tightening and wage inflation are expected build in the months ahead.
From a year ago month in May, producer prices increased 2% after rising at 2.1% in April.
Core PPI that excluding food and energy from a year ago month in May increased at a pace of 2% from 1.9% in the period through April.