Wholesale price inflation unexpectedly accelerated in June to its highest rate since March 2023, according to new data released Friday.
On the surface, the jump in PPI appears to be an unwelcome development for the US economy and the fight to rein in high inflation — and it appears especially jarring landing one day after the BLS announced that consumer prices fell on a monthly basis for the first time in four years.
However, economists caution that monthly data — and especially the category that drove PPI higher in June — can be erratic, and that the unexpected jump in PPI isn’t likely a worrisome sign of any broader inflation pressures building in the pipeline.
The June increase was attributed to a sharp rise in final demand services, specifically trade services margins, which soared 1.9% from May and offset lower energy prices and still-falling goods production prices.
It’s the largest monthly increase for trade services since March 2022.
“The increase was broad-based among wholesalers and retailers of fuel, autos and other goods, but almost certainly is not the start of a resurgence in margins,” Ian Shepherdson, chairman and chief economist for Pantheon Macroeconomics, wrote in a note to clients on Friday. “The data are volatile and often revised a lot. Margins will come under increasing pressure as growth in consumers’ spending continues to slow.”
RandyMarsh
Article URL : https://www.cnn.com/2024/07/12/economy/us-producer-price-index-inflation-june/index.html