WASHINGTON – U.S. producer prices held steady last month despite a big rise in energy costs, as food and vehicle prices plunged, according to a government report on Friday that showed an unexpected absence of inflation pressure.
Energy prices shot up 2 percent in June, the Labor Department (search) said, while food prices dropped 1.1 percent. Outside of those volatile areas, so-called core producer prices fell 0.1 percent, the first decline in four months, as the cost of cars and light trucks plummeted.
Excluding those falling vehicle prices, the core producer price index would have moved up 0.2 percent.
Wall Street (search) economists had expected producer prices to rise 0.4 percent, with core prices up 0.1 percent.
The steady reading in the producer price index (search), a gauge of prices received by farms, factories and refineries, followed a 0.6 percent drop in May and offered the latest sign that inflation pressures earlier in the year may be abating.
The department said on Thursday consumer prices also held steady last month, with prices outside of food and energy up a mild 0.1 percent.
The producer price report showed a 1 percent drop in car prices and a 1.7 percent decline in prices light trucks and SUVs, a reflection of discounting by automakers.
Further back in the production pipeline, cost pressures also appeared contained.
Intermediate goods prices edged up just 0.1 percent, while prices for crude goods dropped 3.3 percent. The core measure of both of those indices declined.