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Fuel rebound, egg shortage push up US wholesale prices

FUELA shortage of eggs and the rebounding cost of gasoline helped push US producer prices up by 0.5 percent in May, the Labor Department reported Friday.

But fears of a surge of inflation were tempered by a low gain for core producer prices — which exclude the volatile food and energy costs — of just 0.1 percent over April.

Tempering gains in good prices was a flat performance in prices for services like trade and transport.

Year-over-year, final demand producer prices were down for the fourth straight month. May prices were down 1.1 percent from a year ago.

“It’s clear that underlying price pressures at the producer level, at least for goods, are very low, thanks to slow wage gains, weak materials prices and the strong dollar,” noted Ian Shepherdson of Pantheon Macroeconomics.

But he pointed out one area of concern: surging costs in hospital services that he suggested could be linked to rising wages.

The latter would add to the case for the Federal Reserve to launch into a long-awaited series of interest rate increases.

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