WASHINGTON (AP) — Rising gasoline costs pushed up the prices U.S. companies receive for their goods and services in June, but overall inflation remains tame.
The Labor Department said Wednesday that the producer price index, which measures the cost of goods and services before they reach the consumer, rose 0.4 percent last month. The increase follows a 0.2 percent decrease in May.
Gas costs rose 6.4 percent in June. Steel prices shot up 3 percent. But prices fell for grains, cheese and rental cars to offset some of those increases.
In the past 12 months, producer prices have risen 1.9 percent, roughly in line with the Federal Reserve's inflation target of 2 percent.
But inflation appears unlikely to accelerate based on producer prices. Crude oil prices have fallen in July, after surging last month on reports of Iraq being destabilized by the Sunni militia known as the Islamic State of Iraq and the Levant.
"Nothing here is going to worry the Fed, particularly not when crude oil prices have most recently fallen back," said Paul Ashworth, chief US economist at Capital Economics.
Consumer prices have tended to track the costs for producers. They rose in May in response to food and energy costs increasing earlier in the year for wholesalers. Consumer prices rose 2.1 percent in May compared to the year prior.
Retailer and wholesaler profit margins increased 0.2 percent in June. Excluding the volatile food, energy and profit margin categories, core producer prices were up 0.2 percent last month.
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