U.S. wholesale prices rose 0.5 percent last month

WASHINGTON – A rise in food and gas costs drove a measure of wholesale prices up sharply in May. But outside those volatile categories, inflation was mild.

The Labor Department said Friday that the producer price index rose 0.5 percent in May from April. Gas prices rose 1.5 percent last month, and food costs increased 0.6 percent.

The increase last month followed a 0.7 percent decline in April and a 0.6 percent drop in March. Both were driven by steep declines in gas prices.

Core prices, which exclude food and energy, rose just 0.1 percent in May. That matches the April increase.

The index measures pre-consumer price changes.

“There really is not much inflationary pressure in the economy,” Paul Dales, an economist at Capital Economics, said in a note to clients.

Aside from sharp swings in gas prices, consumer and wholesale inflation has increased very slowly in the past year. Both the overall and core indexes have risen just 1.7 percent in the 12 months ending in May. That’s below the Federal Reserve’s 2 percent inflation target, allowing the Fed more latitude to pursue its aggressive policies to spur greater economic growth.

The combination of modest economic growth and high unemployment has kept wages from rising quickly. That’s made it harder for retailers and other firms to raise prices.

Most of the May increase in food costs stemmed from a 41.6 percent jump in the cost of eggs, the biggest on record.