Wholesale Prices in U.S. Rise for First Time in Four Months

Wholesale prices in the U.S. unexpectedly rose in June for the first time in four months, reflecting an increase in food costs. The 0.1 percent gain in the producer price index followed a 1 percent decrease the prior month, Labor Department figures showed today in Washington. The median estimate in a Bloomberg News survey of 70 economists called for a 0.4 percent fall. Excluding volatile food and energy, the so-called core measure increased 0.2 percent as projected. A. Schulman Inc. and Kennametal Inc. (KMT) are among companies anticipating raw materials costs will remain restrained as markets from Europe to Asia cool. Weakening growth in the U.S. also may limit price pressures through the production pipeline, reinforcing Federal Reserve policy makers’ projections that inflation is likely to be subdued. “I’m not concerned about inflation at all at this point,” said Michael Moran, chief economist at Daiwa Capital Markets America Inc. in New York, who correctly forecast the gain in prices. “Some decline in commodity prices and a slower rate of growth in both the U.S. and globally suggests restrained prices in coming months.” Stock-index futures held earlier gains after the report as slowing growth in China fueled speculation policy makers will boost stimulus measures. The contract on the Standard & Poor’s 500 Index maturing in September climbed 0.3 percent to 1,333 at 8:44 a.m. in New York. Treasury securities were little changed, with the yield on the benchmark 10-year note at 1.49 percent compared with 1.48 percent late yesterday.