WASHINGTON: US wholesale prices picked up more than expected in June due to service costs, the government reported Friday.
The producer price index (PPI) rose by 0.2 per cent last month, while an initially-reported decline in May was revised upwards, said the Labour Department.
The figures come after a cooler than expected consumer inflation reading, which fanned hopes of the US central bank cutting interest rates as soon as September.
The Federal Reserve has been battling to bring stubborn inflation back to its longer-term two per cent target by keeping rates high, and Fed Chair Jerome Powell has noted “modest” progress on prices recently.
On Thursday, government data showed the consumer price index — a key gauge of inflation — rose 3.0 per cent from a year ago, a slowdown from 3.3 per cent in May.
Analysts said the latest PPI data is unlikely to worry the Fed.
In the PPI report, a 0.6 per cent increase in services costs bumped the overall index higher, the Labour Department said.
From a year ago, PPI rose 2.6 per cent in June, the largest gain since increasing 2.7 per cent in March 2023, the report added.
But an underlying measure stripping out food, energy and trade services was unchanged in June after a 0.2 per cent rise in May.
Some analysts expect the Fed could signal in its July meeting that it intends to lower rates in September.
“Although slightly hotter than expected, a modest rise in the producer price index for June still keeps input prices on a supportive path for cooler inflation prints ahead,” said Ben Ayers, senior economist for Nationwide.
In a media interview on Thursday, San Francisco Fed President Mary Daly said: “I do think with the incoming information on inflation, growth and the labour market, some policy adjustments are likely to be warranted.” – AFP
