Producer Price Index Expected to Rise Only 0.1 Percent
The Producer Price Index, which measures price changes before they reach the consumer, are expected to have risen only 0.1 percent in May, according to Bloomberg Businessweek.
This comes after the Labor Department released its Consumer Price Index, which, excluding food and energy, increased 0.3 percent, the largest gain since July 2008. In April, it rose 0.2 percent.
The mix of a weak economy and inflation has many economist worried.
"I assume people will look at this as another reason the recovery is stalling, giving more fodder to the double dip [recession] theory," said Paul Radeke, vice president at KDV Wealth Management in Minneapolis, to Reuters.
Overall the CPI indicates that U.S. households are spending 3.6 percent more to buy the same goods they did last year. The increase is higher than expected, but TIME points out that this may in fact be a good thing.
"Inflation is a sign of economic activity," writes Stephen Gandel of TIME. "Just ask China. Inflation in that country is running in the double digits. Yet, China's growth economy seems to be what everyone wants right now."
"Economist... expected the CPI this morning to say that inflation in the past year was 3.3 percent. Instead, it turns our prices rose 3.6 percent. That's a sign that the economy is strong than expected, not weaker," he added.