Producer price index falls in April
The drop in producer prices means inflation is not likely to increase and will remain at the target of 2 percent, according to Bloomberg.
“Looking ahead, consumer prices should remain contained,” said Michelle Meyer, an economist at Bank of America Merrill Lynch, in an interview with Reuters. “The Fed shouldn’t be worried about inflation.”
The drop was the biggest since October and the first in 2012, according to Reuters. A decrease in producer prices and raw materials means manufacturers will have less incentive to charge customers more.