NASHVILLE, TENN. (RFD NEWS) — Wholesale inflation eased in June as lower energy costs pushed producer prices lower, offering a sign that inflation pressures at the producer level may be moderating.
According to the U.S. Bureau of Labor Statistics, the Producer Price Index (PPI) for final demand fell 0.3 percent in June after rising 0.6 percent in May. On a year-over-year basis, producer prices increased 5.5 percent, down from a 6.0 percent annual gain the previous month.
The monthly decline was driven largely by lower goods prices, particularly energy. Goods prices fell 1.4 percent, with gasoline prices dropping 12 percent during the month. Food prices also edged lower, helping pull the overall index down. Service prices, however, continued to rise, increasing 0.2 percent in June.
Excluding the more volatile food and energy categories, core PPI increased 0.2 percent for the month and was 4.7 percent higher than a year ago, indicating underlying inflation pressures remain elevated even as headline wholesale prices declined.
The report follows this week’s Consumer Price Index (CPI) release, which also showed easing inflation. Together, the two reports suggest price pressures moderated in June, though inflation remains above the Federal Reserve’s long-term target. Economists say continued movements in energy markets and global geopolitical developments will be important factors influencing inflation in the months ahead.
The Producer Price Index measures the average change in prices received by domestic producers for their goods and services and is closely watched as an indicator of inflation trends that can eventually affect consumers.
