Producer Prices U.S. Decrease for First Time in Four Months

Wholesale prices in the U.S. fell in April for the first time in four months, led by a decline in fuel costs that signals inflation may cool. The producer price index dropped 0.2 percent after no change in March, Labor Department figures showed today in Washington. Economists projected the gauge would be unchanged in April, according to the median estimate in a Bloomberg News survey. The 1.9 percent increase over the past 12 months was the smallest since October 2009. Falling raw-material costs mean companies will have less incentive to charge customers more. Slowing inflation would underscore views of some Federal Reserve policy makers who have said higher fuel prices will have only a temporary effect, allowing the central bank to stick to its plan to keep interest rates low at least until late 2014. “Inflation’s not really a worry, neither is deflation at this stage,” said Sean Incremona, a senior economist at 4Cast Inc. in New York, who accurately forecast a decline in the producer-price index. “It doesn’t seem like there’s much cause for companies to pass along costs at this point.” Stock-index futures held earlier losses after the report. The contract on the Standard & Poor’s 500 Index maturing in June dropped 0.8 percent to 1,347.3 at 8:45 a.m. in New York after JPMorgan Chase & Co. revealed it had a $2 billion trading loss. So-called core prices, which exclude food and fuel, rose 0.2 percent in April, matching the median forecast of economists surveyed, after climbing 0.3 percent the prior month, today’s report showed. About a quarter of the increase in April was attributable to pharmaceuticals, the report said.