Cheaper gas pushes down measure of US wholesale prices by 1 per cent, most in nearly 3 years

WASHINGTON – A steep drop in gasoline costs drove down a measure of U.S. wholesale prices in May by the most since July 2009. But outside the food and energy categories, prices increased moderately.

The Labor Department says the producer price index fell 1 per cent in May, after dropping 0.2 per cent in April. Gasoline prices dropped nearly 9 per cent, the most in almost three years. Food costs also fell.

The index measures price changes before they reach the consumer. Excluding food and energy, the so-called “core” index increased 0.2 per cent, the same as in April.

In the past 12 months, wholesale prices are up only 0.7 per cent, the smallest gain since October 2009. The core index has risen 2.7 per cent in the same period. That’s the same pace as last month.