U.S. wholesale inflation moved lower in June, mirroring the recent easing in consumer prices. The U.S. Bureau of Labor Statistics reported that the Producer Price Index (PPI) for final demand declined by a seasonally adjusted 0.3% in June, following a 1.1% increase in May. Prior to the release, analysts had expected June’s reading to be roughly in line with May’s gain, making the pullback a notable shift from the previous month’s momentum.
On a year-over-year basis and before seasonal adjustment, the index for final demand rose 5.5% for the 12 months ended in June. That annual increase marks a moderation from the 6.5% gain recorded over the 12 months ended in May, indicating that wholesale price pressures have slowed but remain elevated compared to the prior year. When food, energy, and trade services are excluded, the index for final demand increased 5.1% over the past year, unchanged from May’s core reading.
The June decline in the overall PPI for final demand was driven primarily by lower prices for final demand goods. Prices in that segment fell 1.4% during the month, offsetting a modest increase in services. The index for final demand services advanced 0.2% in June, showing that service-related price growth continued even as goods prices retreated.
Energy costs were a key factor behind June’s weaker PPI reading, similar to their impact on consumer prices. Energy prices declined 6.4% for the month after having risen 8.4% in May, representing a sharp swing in the energy component over a two-month period. This reversal in energy pricing contributed significantly to the overall movement of the index for final demand goods and, in turn, to the headline PPI result.
The wholesale inflation report followed the release of June’s Consumer Price Index, which showed consumer inflation decelerating to 3.5% year-over-year. Together, the PPI and CPI data underscore a period of slower price increases across both the producer and consumer segments of the economy, with energy playing a central role in the month-to-month changes.
