Unexpected bad news for inflation: Wholesale prices rose in June
CNN
Wholesale price inflation unexpectedly accelerated in June to its highest rate since March 2023. That’s an unwelcome development for the US economy one day after the government announced that consumer prices declined on a monthly basis for the first time in four years.
Wholesale price inflation unexpectedly accelerated in June to its highest rate since March 2023. That’s an unwelcome development for the US economy one day after the government announced that consumer prices declined on a monthly basis for the first time in four years. The Producer Price Index, a measurement of average price changes seen by producers and manufacturers, was 2.6% for the 12 months ended in June, unexpectedly rising from the 2.4% annual rate seen in May, according to Bureau of Labor Statistics data released Friday. On a monthly basis, prices rose 0.2% after holding flat in May. The June increase was attributed to a sharp rise in final demand services, specifically trade services margins, which soared 1.9% from May. It’s the largest monthly increase for that category since March 2022. “Strong PPI readings tend to support pricing power, which is clearly easing, and stronger profit margins,” Joe Brusuelas, chief economist for RSM US, told CNN via emails. “My sense is that with the economy and inflation cooling back towards more sustainable levels that margins are likely to remain strong but narrow.” Economists had expected that prices would increase 0.1% on a monthly basis and hold steady at 2.2% annually.
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