The Final Demand PPI for June showed producer prices up 0.1% from May, and up 1.7% compared to June 2017. The core PPI — excluding food, energy, and trade services — was flat month-over-month, but up 2.1% from a year ago.
Energy costs fell 3.1% in June from May, driven by a 5.0% decline for gasoline prices. Food prices were up 0.6%, and saw sharp increases in fresh fruits (up 13.7%), grains (up 16.8%), and eggs (up 24.7%). Final demand for services was up 0.4%, reflecting a steep rise for trade services (up 1.3%). Final demand less trade services only (about 80% of total final demand) was down 0.2% in June from May.
The PPI is not one of the more closely watched inflation measures in relation to monetary policy, but Fed policymakers will have some extra confirmation here that price pressures are largely confined to services while commodities prices are more volatile and exerting only sporadic upward pressure.
Disclaimer: Whetstone Analysis provides commentary as a service to its subscribers. Whetstone Analysis is not responsible for, and expressly disclaims all liability for, damages of any kind arising out of use, reference to, or reliance on any information contained within the site. While the information contained within the site is periodically updated and every effort is made to ensure its accuracy, no guarantee is given that the information provided in this Web site is correct, complete, and up-to-date. Click here to read our full Disclaimer.