Input Stories

The producer price index for final demand did not budge over the month of June, but posted a 2.3% increase over the year, down from the 2.7% hike in May (Bureau of Labor Statistics).

• Prices for final demand goods rose 0.3% in June—the largest monthly increase since February.
• Meanwhile, the index for final demand services declined 0.1%.

More details: “Prices for final demand less foods, energy and trade services were unchanged in June after inching up 0.1% in May.”

• “For the 12 months ended in June, the index for final demand less foods, energy and trade services advanced 2.5%.”

Within the index: Communication and related equipment prices rose 0.8% over the month and 6.0% from June 2024, while prices for gasoline, residential electric power and meats also increased.

• Prices for private capital equipment for manufacturing industries jumped 4.2% over the year, the largest yearly increase since October 2023.

Looking ahead: “Economists watch the PPI closely because some of its data are used to calculate the Federal Reserve’s preferred inflation metric, the personal-consumption expenditures price index,” The Wall Street Journal (subscription) noted.

• Core PCE inflation rose to 2.7% in May, and the next report will be released in two weeks.
• “Without more progress toward the Fed’s 2% target, a rate cut at the central bank’s next meeting later this month is seen as unlikely.”