Wholesale prices rose more than expected in June as Wall Street assesses when the Fed will feel comfortable cutting interest rates.
producer price index Up 0.2% last month, the U.S. Department of Labor’s Bureau of Labor Statistics reported Friday. Economists surveyed by Dow Jones expected the index to rise 0.1%. PPI increased by 2.6% compared with last year.
PPI is a measure of the price producers can get for goods and services on the open market. In June, higher prices for services offset lower prices for goods.
The reading was an increase from May’s data, which was also revised upward. Friday’s report said the index was unchanged in May from an initially reported decline of 0.2%.
While economists and investors tend to place more emphasis on consumer-focused inflation data, the higher-than-expected PPI data runs counter to recent data showing lower inflation.
Ahead of Friday’s report, June consumer price index came in below expectations on Thursday. The CPI actually shows that overall inflation is declining month over month and is currently increasing at 3% annually.
The central bank’s next policy meeting will be held at the end of July, and the market is generally expected to keep interest rates stable. Traders are increasingly looking to the September meeting as a possible time for the first rate cut.
The Fed’s preferred inflation reading is the personal consumption expenditures price index. June PCE data is scheduled to be released on July 26.
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