US wholesale prices rose for the second consecutive month in May almost entirely due to rising prices for energy products as the economy struggles to emerge from recession, the government said today.
The 0.2% rise was lower than expected by Wall Street economists, who had forecast the producer price index for finished goods to rise by 0.6%. The Labor Department said the May figure followed the index's 0.3% rise in April and a decline of 1.2% in March.
On a 12-month basis, finished goods prices fell 5% from May 2008, the largest annual decline since August 1949.
When food and energy prices were excluded for May, core wholesale prices fell slightly, by 0.1%, marking the first decline since October 2006.
The US economy has been in recesssion since December 2007 but the contraction has eased, from 6.1% in the last quarter to 5.7% in the first quarter of 2009.
Meanwhile, separate data from the government shows that US housing construction starts and building permits rose more than expected in May after falling to record lows in April.
The Commerce Department said permits to build privately owned homes, an indicator of future activity, leapt to a seasonally adjusted annual rate of 518,000 in May, an increase of 4% from the previous month.
Building permits had fallen in April to a revised rate of 498,000, the lowest level since the data began to be tracked in 1960. The May increase in building permits topped analysts' consensus forecast of 508,000 permits authorised.
On a 12-month basis, building permits in May were 47% below the May 2008 level.
Construction starts on new homes also rebounded in May, vaulting 17.2% from April to a seasonally adjusted annual rate of 532,000.
The department revised the April figure to 454,000 starts, a low point unseen since publication of the data began in 1959. The increase in May construction starts was sharply higher than the 485,000 expected by analysts. But it was 45.2% lower than a year ago.
Separate figures from the Federal Reserve showed that industrial production fell 1.1% in May, a sharper than expected decline and a steeper drop than a 0.7% slide in April.
