U.S. wholesale inflation remained in check during May thanks to falling food prices, but underlying costs edged higher and raw-materials prices jumped.

Separately, U.S. retail sales rose just slightly last monght, suggesting the economy is weakening as demand tumbled for cars and such home improvement goods as furniture and building materials.

Producer prices for finished goods rose 0.2% in May after climbing 0.9% the previous month, the U.S. Labor Department said today. Excluding food and energy costs, core producer prices climbed 0.3%, compared with April’s 0.1% rise. Last month’s core gain was the highest since February.

Economists had expected overall producer prices to rise 0.4% with the core up 0.2%.

The higher-than-expected core producer-price reading will likely keep U.S. Federal Reserve policy makers on edge about the prospect of higher energy and commodity prices seeping into the broader economy.

The Fed is widely expected to raise interest rates by a quarter percentage point to 5.25% when it meets June 28 and 29.

U.S. consumer-price data for May will be released on Wednesday.

For the year, overall wholesale prices climbed 4.5%, and the core index was up 1.5% from year-ago levels.

Raw-materials prices rose 2% in May, the Labor Department said, and excluding food and energy they jumped 6.2%, the steepest rise since July 2004, reflecting higher prices for copper, aluminum and steel.

Meanwhile, retail sales inched up by a seasonally adjusted 0.1%, the U.S. Commerce Department said today. April sales were much stronger than first thought, however, rising by 0.8% as opposed to the previously estimated 0.5% gain.

Economists had forecast retail sales to remain flat in May.

Sales in May of auto and parts retailers decreased by 1.6%, after rising by 0.8% in April. Outside the auto sector, all other retail sales climbed by 0.5, meeting economists’ expectations. Sales excluding autos rose 0.8% in April.

Gas-station sales increased by 1.9% last month after rising 5.5% in April. Stripping away sales at gas stations, demand at all other retailers fell last month, down 0.1%.

Excluding autos and gasoline, all other retail sales went 0.3% higher in May. Demand excluding gas and autos rose by 0.1% in April.