Producer Prices Slow To 1.6% In May

The reduced monthly PPI growth rate resulted in 9.2% growth YTD. Previous monthly rates were 2.5% in April and 1.9% in March. Concorde Capital: Despite the slow-down in PPI growth rates in May, the CPI/PPI gap continues to expand: from 0.3% in Feb to a current level of 3.5%. However, we expect the difference between PPI and CPI annual rates in 2005 will be almost half that of 2004: ~6% versus last year?s 11.8%. Steel prices, once a major PPI driver, remained unchanged in May due to a reduction in world prices.