US wholesale prices decline for chemicals, plastics in May

16 June 2010 16:29  [Source: ICIS news]

WASHINGTON (ICIS news)--US wholesale prices for organic chemicals and plastic resins fell in May, the Labor Department said on Wednesday, part of a general decline in overall producer prices.

The department said that prices paid at the producer level - also known as wholesale prices - declined by 0.4% in May from April for basic organic chemicals.

That downturn followed month-to-month wholesale price gains for chemicals of 3.2% in March and 0.6% in April.

For plastic resins and materials, the producer price decline in May was much sharper, falling by 7.6% compared with April.

The May decline followed an 11.4% gain in April and a 1.8% drop in March.

Overall, the department said its producer price index (PPI) edged down by 0.3% in May and marked a second straight monthly decline after April’s marginal 0.1% drop.

Most of the decline in overall wholesale prices last month was attributed to a 1.5% decline in energy products, chiefly gasoline, and a 0.6% drop in consumer foods.

If energy and food products are taken out of the overall wholesale prices data, producer prices for all other goods rose slightly by 0.2% in May, the department said.

Economists typically look at producer prices minus fuels and foods - the so-called core wholesale prices - because those two categories frequently show wide month-to-month swings.

With the core producer prices data showing that modest 0.2% increase in May, economists saw little threat of inflationary pressures. That in turn would allow the Federal Reserve Board, the US central bank, to maintain its record-low interest rates policy without fear of runaway inflation pressures.

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By: Joe Kamalick
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