U.S. producer prices rose for a second straight month in May as the cost of energy products and services increased, but the lingering effects of a strong dollar and lower energy prices will likely keep inflation tame for a while.

The Labor Department said on Wednesday its producer price index for final demand increased 0.4% last month after rising 0.2% in April. In the 12 months through May, the PPI slipped 0.1% after being unchanged in April.

Economists polled by Reuters had forecast the PPI gaining 0.35% last month and slipping 0.1%  from a year ago.

A surge in the dollar and the plunge in oil prices between June 2014 and December 2015 have dampened price pressures, keeping inflation below the Federal Reserve's 2% target. 

Although the dollar has dropped 1.5% against the currencies of the United States' main trading partners this year and oil prices are near $50 per barrel, underlying inflation remains benign. 

Prices for U.S. Treasuries fell after the data, while the dollar rose against the yen and euro. U.S. stock index futures were trading higher.

Tame inflation and a sharp slowdown in U.S. job gains in May will likely encourage the Fed to leave interest rates unchanged at the end of a two-day policy meeting later on Wednesday. The U.S. central bank raised its benchmark overnight interest rate in December for the first time in nearly a decade.

Last month, energy prices jumped 2.8% after increasing 0.2%  in April. Energy prices accounted for two-thirds of the 0.7% rise in the cost of goods in May. 

Prices for services rose 0.2% after inching up 0.1% in April. The increase reflected an increase in margins received by wholesalers and retailers.

A key measure of underlying producer price pressures that excludes food, energy and trade services dipped 0.1% last month after rising 0.3% in April. 

The so-called core PPI was up 0.8% in the 12 months through May. The core PPI increased 0.9% in April.