Wholesale Inflation Follows Consumer Prices with June Decline
U.S. wholesale inflation followed the example of consumer price inflation in June with a monthly decline. The Producer Price Index for final demand fell by a seasonally adjusted 0.3% in June after rising 1.1% the previous month, the U.S. Bureau of Labor Statistics reported Wednesday. Analysts had expected the June figure to be in line with the May reading.
On an unadjusted basis, the index for final demand increased 5.5% for the 12 months ended in June, representing a slowdown from the 6.5% annual increase reported in May. With food, energy and trade prices stripped out, the index held steady from the May figure of 5.1%.
The June decline in the index for final demand can be attributed to prices for final demand goods, which fell 1.4%. At the same time, the index for final demand services moved up 0.2%.
As with the Consumer Price Index, a drop in energy prices was a key factor in the June PPI results. Energy costs declined 6.4% for the month after rising 8.4% in May.
The report follows Tuesday’s CPI, which showed consumer inflation decelerating to 3.5% year-over-year.