U.S. Producer Price Gain Held Back by Lower Energy Prices; Core Index Is Unchanged

The Producer Price Index for final demand increased 0.2% (2.6% y/y) during June after holding steady in May, revised from a 0.2% decline, according to the Bureau of Labor Statistics. A 0.1% gain had been expected in the Action Economics Forecast Survey. Producer prices excluding food, energy & trade services remained steady (+3.1% y/y) in June after rising 0.2% in May, revised from no change. The PPI excluding food & energy jumped 0.4% (3.0% y/y) after rising 0.3% in May, revised from no change. A 0.2% rise had been expected.

Services prices for final demand increased 0.6% (3.5% y/y) in June, following a 0.3% increase in May. Trade services prices strengthened 1.9% (2.7% y/y) after a 0.7% gain. Trade of finished goods prices increased 2.0% (2.2% y/y) following a 1.0% increase. Prices for final demand transportation and warehousing services fell 0.4% (+0.2% y/y) after a 0.8% decline. Services prices less these costs edged up 0.1% (4.2% y/y) following a 0.2% increase.

Final demand goods prices excluding food & energy held steady last month (+1.8% y/y) after rising 0.2% in May. Finished consumer goods prices also were unchanged in June (+1.9% y/y) after rising 0.3% in May. Core nondurable goods prices held steady in June (+2.5% y/y) after moving up 0.5% in May. Durable consumer goods prices were unchanged (+1.0% y/y) for a second straight month. Capital equipment prices edged 0.1% higher (2.6% y/y) for the third straight month, while government-purchased goods prices held steady (2.2% y/y) following a 0.1% easing.

Final demand energy prices declined 2.6% last month (+1.8% y/y) after a 2.0% increase. Gasoline prices fell 5.8% (-7.8% y/y) after falling 7.3% in May. Home heating oil prices declined 3.5% (+5.8% y/y) following a 6.1% decline. Electric power prices weakened 1.1% (+2.6% y/y) following no change. Natural gas prices increased 1.7% (0.9% y/y) after rising 0.4% in May. Food prices eased 0.3% (+1.1% y/y) after holding steady in May. The decline reflected a 6.3% weakening (-15.0% y/y) in fruit & melon prices as well as a 4.4% drop (-10.2% y/y) in fresh vegetable costs. Grain prices fell 1.7% (-29.0% y/y) and processed fruit & vegetable costs weakened 1.0% (+2.7% y/y). Offsetting these declines, beef & veal prices rose 2.0% (1.4% y/y) and fresh egg prices strengthened 55.9% (98.6% y/y).

Construction costs rose 0.4% in June (-0.6% y/y) after holding steady in May.

Prices for intermediate demand processed goods declined 0.2% (-0.5% y/y) in June after falling 1.4% in May. Processed energy goods prices fell 1.1%, while food prices rose 0.2%. The index for intermediate demand unprocessed goods increased 1.4% (2.7% y/y).

The PPI data are published by the Bureau of Labor Statistics and can be found in Haver’s USECON database. Further detail is contained in PPI and PPIR. The expectations figures are available in the AS1REPNA database.