Wholesale Prices Drop 0.1 Percent

Wholesale prices declined in June for the first time in eight months, helped by a big drop in energy prices and the largest fall in fruit prices in 15 years.

The 0.1 percent decline in the Labor Department’s Producer Price Index was seen as welcome confirmation for the Federal Reserve that its switch last week from fighting inflation to fighting recession did not mean it was abandoning the price battle prematurely.

The small decline in the PPI, which measures inflationary pressures before they reach the consumer, followed no change at all in May and a steep 0.5 percent rise in April. It marked the first time wholesale prices had fallen since a 0.4 percent decline last October.

In another report, the government said first-time claims for unemployment benefits were unchanged last week at 370,000 while the closely watched four-week moving averaged dipped for a second straight week.