Bonds & Rates
Home›Bonds & Rates›Inflation›US PPI falls in June as energy-led goods prices drop
US PPI falls in June as energy-led goods prices drop
The Producer Price Index declined 0.3% month over month, with goods prices down 1.4% and energy plunging 6.4%.
US producer prices unexpectedly fell in June, adding to recent signs that inflation pressures moderated as the Federal Reserve weighs the outlook. Action Forex said the Producer Price Index dropped 0.3% month over month versus expectations for a 0.2% rise, while annual producer inflation slowed to 5.5% year over year from a revised 6.0%.
The report pointed to weakness concentrated in goods, with goods prices down 1.4% month over month, the largest monthly decline since July 2022. Energy prices fell 6.4%, led by gasoline prices dropping 12.0%, and the energy decline accounted for nearly two-thirds of the drop in final demand goods, while food prices slipped 0.6%.
Core goods excluding food and energy still rose 0.2%, and final demand services increased 0.2%, reflecting firmer retail margins and selected business services. Action Forex also noted the Fed’s preferred measure, final demand less foods, energy and trade services, edged up 0.1% after a 0.8% jump in May, with the annual rate holding at 5.1%.
Taken alongside Tuesday’s softer consumer inflation report, the latest PPI data strengthened the view that inflation pressures moderated through June before a recent rise in crude oil prices. The outlet said the figures give policymakers greater flexibility in the near term.
Latest closeWTI crude $80.00 ▼5.5%|Gasoline (RBOB) $2.964 ▼8.0%