US wholesale prices fall by most in nearly 3 years

WASHINGTON (AP) — A steep drop in gasoline costs drove down a measure of U.S. wholesale prices in May by the most since July 2009. But outside the food and energy categories, prices increased moderately.

The producer price index fell 1 percent in May, after dropping 0.2 percent in April, the Labor Department reported today. Gasoline prices dropped nearly 9 percent, the most in almost three years. Food costs also fell.

The index measures price changes before they reach the consumer. Excluding food and energy, the so-called "core" index increased 0.2 percent, the same as in April.

In the past 12 months, wholesale prices are up only 0.7 percent, the smallest gain since October 2009. The core index has risen 2.7 percent in the same period. That's the same pace as last month and down from a 12-month change of 3.1 percent in January.