WASHINGTON — Americans are finally getting some relief from high gas and food prices.
Wholesale food prices fell last month by the most in nearly a year, and gas prices keep dropping after peaking in May.
Tuesday’s welcome news comes after a rough patch that has stoked worries the economic recovery is slowing. Lower prices would help give Americans more money to spend on other things and rejuvenate economic growth.
Food prices at the wholesale level fell 1.4 percent, the Labor Department said. It was the largest drop since last June. About 40 percent of that decline resulted from steep declines in vegetable and fruit prices.
The drop in food prices followed harsh winter freezes, which had driven up prices of tomatoes and other vegetables in February. Even if prices don’t fall further, economists say they probably won’t go much higher.
It may take as long as six months, but lower wholesale prices should work their way to the grocery store.
Overall, the producer price index, which measures price changes before they reach the consumer, rose 0.2 percent in May. That’s much lower than April’s 0.8 percent gain.
Gas prices at the wholesale level rose in May by the smallest amount in eight months. At the pump, they’re coming down. On Tuesday, the national average was $3.70 a gallon, according to AAA.
Another report Tuesday showed that retail sales fell 0.2 percent in May. It was the first decline in 11 months and came mostly because Americans bought fewer cars.
Mark Vitner, an economist at Wells Fargo Securities, said the retail-sales report shows that household budgets are still tight, forcing people to put off buying expensive items.
Lower food and gas prices “should provide some near-term relief,” Vitner said, “but a sustainable pickup in spending will not likely occur until job growth picks up and the unemployment rate falls.”
However, the Business Roundtable, which represents CEOs for the 200 biggest U.S. companies, said 51 percent of chief executives plan to step up hiring in the second half of the year.
