BLS: PPI Cools to 5.5% Y-o-Y in June as Goods Prices Drop

SECAUCUS, NJ (DTN) – U.S. wholesale prices rose 5.5% for the 12 months ended in June as inflationary pressures cooled, the U.S. Bureau of Labor Statistics reported Wednesday (7/15).

The annual increase follows a higher rate in the previous month, reflecting a broader deceleration in the cost of raw materials and wholesale production inputs.

On a monthly basis, the Producer Price Index (PPI) for final demand fell 0.3% in June, effectively reversing a revised 0.6% increase recorded in May. The June decline in wholesale inflation was entirely driven by prices for final demand goods, which dropped 1.4% to mark their largest single-month decrease since July 2022.

Leading the sharp drop in goods, wholesale energy costs plunged 6.4% during the month, while the index for final demand foods moved down by 0.6%. Meanwhile, prices for final demand services moved slightly higher, tracking a modest 0.2% increase in June after an initial drop of 0.1% in the prior month.

Nearly two-thirds of the monthly decline in goods was traced to a 12.0% plunge in gasoline prices, while wholesale diesel fuel and jet fuel costs also fell. Conversely, margins for fuels and lubricants retailing jumped 13.0% during the month, offsetting some of the downward pressure across the broader wholesale service business categories.

Core wholesale prices, which strip out volatile food, energy, and trade services, edged up 0.1% in June after a much larger 0.8% jump in May. On a 12-month basis, core PPI increased 5.1% in June, exactly matching the annual gain from the prior month as core wholesale inflation trended flat.