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12/07/24
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US PPI Slightly Higher in June
In June, U.S. producer prices rose slightly more than anticipated amid an increase in the cost of services, although that didn’t change expectations that the Fed may start cutting interest rates in Sept.
Details of the elements in the producer price report that are included in the calculation of the key inflation gauge that the U.S. central bank tracks were generally favorable. This, together with the softer readings in the CPI report led to economists expecting that personal consumption expenditures inflation in June rose slightly.
On Friday, the Labor Department’s Bureau of Labor Statistics said that in June, the producer price index for final demand was 0.2% higher after being unchanged in May. Economists had expected the PPI would edge up 0.1%.
The PPI rose 2.6% in the 12 months through June. That was the biggest year-on-year increase since March 2023 and came after May’s 2.4% advance.
The increase in the PPI last month was mainly due to a 0.6% rise in the price of services. In May, services rose 0.3%.
They were bolstered by a 1.9% rise in margins for trade services, which records changes in margins received by retailers and wholesalers, mostly reflecting a 3.7% rise in vehicle and machinery wholesaling. The cost of warehousing and transportation services dropped 0.4%.
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