By Nathalie Voit
Wholesale prices hit a near record-high in June as the cost of energy skyrocketed, the Department of Labor’s Bureau of Labor Statistics division reported on July 14.
The Producer Price Index (PPI), which measures inflation from the perspective of American producers, saw final demand prices advance 11.3% for the 12 months ending in June. This was the highest annual gain since March’s 11.6% PPI reading.
Month-over-month, prices for final demand goods and services rose 1.1% in June. Dow Jones analysts had expected a 0.8% gain, according to CNBC.
Soaring energy prices drove most of the surge in the index for final demand. Nearly 90% of the June increase can be attributed to a 10.0% jump in prices for final demand energy products such as oil, natural gas, and diesel fuel.
Excluding food and energy costs, so-called “core” PPI rose 0.3% for the month, well below Wall Street’s 0.5% estimate.
Core PPI climbed 6.4% on a 12-month basis.
June marked the sixth consecutive increase in the index for final demand products. Inflation at the wholesale level can mostly be traced to this index as opposed to the final demand services index, which rose just 0.4% in the month. In contrast, costs for final demand goods in June jumped 2.4%. Gasoline prices, in particular, reported 18.5% inflation. The government noted that over half of the increase in the index for final demand goods could be traced to fuel costs.
Other indexes, including diesel fuel, electric power, residential natural gas, and motor vehicles and parts, also shifted upward in June.
