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Key Report Gives Muddled Picture of US Inflation


A closely watched measure of U.S. inflation is showing mixed results.

Prices paid to producers for goods other than food and fuel rose .3 percent in May, an increase over the previous month. But overall, prices rose .2 percent, less than the previous month.

The report Tuesday from the Labor Department is one of the key pieces of information that the U.S. central bank will study at the end of the month when it considers another interest rate increase. The Federal Reserve has been trying to fend off inflation by steadily raising interest rates for the past two years.

Investor worries that rising interest rates will choke off an economic recovery have contributed to recent sharp declines in stock prices in many markets around the world.

Some information for this report was provided by AFP, AP and Reuters.

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