A rebound of core producer prices in the United States today reinforced investors expectations for the Federal Reserve to hold interest rates unchanged.
The US producer price index, a gauge of prices paid at the farm gate and factory door, declined by 0.2 per cent last month after shooting up by 0.9 per cent in May, the first decline since January.
But after stripping out volatile food and energy costs, core prices in June climbed 0.3 per cent after gaining 0.2 per cent in May. Petrol prices dropped 3.9 per cent, the biggest decline since a 13 per cent plunge in January.
That trend has since been reversed as crude oil has surged to 11 month highs in July and petrol prices have rebounded.
Economists surveyed by Reuters had forecast that both overall producer prices and core prices would rise by 0.2 per cent.
US industrial output rose by a slightly larger than expected 0.5 per cent on a surge in the production of automobiles a Federal Reserve report showed today.
Treasury bonds extended losses on inflation concerns after the PPI data, while the dollar held steady, and US stock index futures edged up.