Wholesale prices rose 0.2% in June, slightly more than expected
A measure of wholesale prices rose more than expected in June as Wall Street assesses when the Federal Reserve will feel comfortable cutting interest rates.
The producer price index rose 0.2% last month, the Labor Department’s Bureau of Labor Statistics reported Friday. Economists surveyed by Dow Jones had expected a 0.1% increase for the index. The PPI is now up 2.6% over the past year.
The PPI is a measure of the prices that producers can obtain for their goods and services on the open market. In June, an increase in the price of services offset a fall in the price of goods.
The figure is up from May’s, which was also revised upward. Friday’s report said the index was unchanged in May, compared with a 0.2% decline in the original release.
The higher-than-expected PPI reading contradicts recent data showing declining inflation, although economists and investors tend to give more weight to consumer-focused inflation readings.
Friday’s report comes after the June consumer price index came in cooler than expected on Thursday. The CPI showed headline inflation slowed on a monthly basis and now stands at 3% year-over-year.
The central bank’s next monetary policy meeting is due to take place in late July and is expected to keep interest rates steady. Traders are increasingly interested in the September meeting as the likely time for the first rate cut.
The Fed’s preferred inflation reading is the personal consumption expenditures price index. June PCE data will be released on July 26.