U.S. wholesale prices declined 0.6 percent in May, the biggest drop in more than two years, as the costs for energy and food decreased, the Labor Department announced today. The department's producer price index (PPI)-which measures prices before goods reach consumers-had risen 0.6 percent in April and 0.7 percent in March, raising worries that inflation could accelerate from its moderate growth of the past several years. Three-quarters of the May PPI decline was due to a 3.5 percent decrease in energy prices, following three consecutive months of significant gains in energy costs. But prices were well contained in general, with the "core" rate of PPI-which excludes volatile energy and food prices-rising only 0.1 percent in May. May's drop in PPI was much bigger than the 0.2 percent decline expected by economists. Over the past 12 months, wholesale prices have risen by 3.5 percent, and the core PPI has risen a more modest 2.6 percent. --More 2129 Local Time 1829 GMT
