The Producer Price Index (PPI), which measures wholesale prices, rose in June after seeing no change in May. Final demand prices rose 0.2% in June after remaining unchanged in May and increasing 0.5% in April, in seasonally adjusted figures, the Bureau of Labor Statistics (BLS) said in a Friday (July 12) press release. “The June rise […]
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The Producer Price Index (PPI), which measures wholesale prices, rose in June after seeing no change in May.
Final demand prices rose 0.2% in June after remaining unchanged in May and increasing 0.5% in April, in seasonally adjusted figures, the Bureau of Labor Statistics (BLS) said in a Friday (July 12) press release.
“The June rise in the index for final demand can be traced to a 0.6-percent increase in prices for final demand services,” the BLS said in the release. “In contrast, the index for final demand goods decreased 0.5 percent.”
The PPI’s rise was greater than expected, CNBC reported Friday. Economists surveyed by Dow Jones predicted an increase of 0.1%, per the report.
The faster-than-expected rise contradicts other recent data that shows inflation slowing, but this wholesale data is generally considered less important than consumer prices, the report said.
Similarly, Reuters reported Friday that while the PPI’s increase was greater than the 0.1% anticipated by the economists it had polled, it did not change their expectations that the Federal Reserve could start cutting interest rates.
For the 12 months ended in June, on an unadjusted basis, the index for final demand rose 2.6%, marking the largest increase since the 2.7% advance seen in the 12 months ended March 2023, according to the BLS press release.
Nearly all the increase in prices for final demand services in June resulted from a 1.9% jump in margins for final demand trade services, the release said.
Most of the June decrease in prices for final demand goods is attributed to a 2.6% drop in the index for final demand energy, per the release.
The PPI measures wholesale prices, meaning some of the input costs that are tied to the day-to-day cost for merchants and other businesses. Generally speaking, changes in the wholesale prices lead to changes in the Consumer Price Index (CPI) down the line.
The release of the June PPI data comes a day after the BLS issued a Consumer Price Index (CPI) that showed that, at least overall, the pace of inflation cooled in June.
Although there was a bump in food prices month over month, inflation was 3% in June, on an annualized basis, compared with 3.3% in May.
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