Posted: Jul 14, 2011 8:50 AM by Greg Boyce
WASHINGTON (AP) - Companies paid less for raw materials and factory goods in June, evidence that inflation pressures are weakening as gas prices fall.
The Labor Department says that the Producer Price Index, which measures price changes before they reach the consumer, declined 0.4 percent in June, the steepest drop since February 2010. Wholesale energy prices fell 2.8 percent, the biggest decline in nearly two years.
There's also word today that consumers spent more on cars and in big chain stores in June but falling gas prices held back retail sales. The Commerce Department says retail sales rose a modest 0.1 percent last month. That follows a 0.1 percent decrease in May, the first time in 11 months that sales fell.
When excluding autos, retail sales were flat in June.