Current:Home > FinanceUS wholesale inflation picked up in June in sign that some price pressures remain elevated-LoTradeCoin
US wholesale inflation picked up in June in sign that some price pressures remain elevated
View Date:2024-12-23 16:17:03
WASHINGTON (AP) — Wholesale prices in the United States rose by a larger-than-expected 2.6% last month from a year earlier, a sign that some inflation pressures remain high.
The increase, the sharpest year-over-year increase since March 2023, comes at a time when other price indicators are showing that inflation has continued to ease.
The Labor Department said Friday that its producer price index — which tracks inflation before it reaches consumers — rose 0.2% from May to June after being unchanged the month before. Excluding food and energy prices, which tend to bounce around from month to month, so-called core wholesale prices increased 0.4% from May and 3% from June 2023.
The increase in wholesale inflation last month was driven by a sizable 0.6% rise in services prices, led by higher profit margins for machinery and auto wholesalers.
By contrast, the overall prices of goods fell 0.5%. Gasoline prices tumbled 5.8% at the wholesale level. Food prices also dropped.
The producer price index can provide an early sign of where consumer inflation is headed. Economists also watch it because some of its components, notably healthcare and financial services, flow into the Federal Reserve’s preferred inflation gauge — the personal consumption expenditures, or PCE, index.
Friday’s wholesale figures follow the government’s report Thursday that consumer inflation cooled in June for a third straight month. Consumer prices declined 0.1% from May to June — the first such drop in overall inflation since May 2020, when the economy was paralyzed by the pandemic.
As a whole, this week’s price figures, along with other recent data, still suggest a continued slowdown in the inflation that first gripped the nation three years ago, when the economy rocketed out of the pandemic recession, leaving deep supply shortages and sending prices soaring.
The Fed raised its benchmark interest rate 11 times in 2022 and 2023, to a 23-year high, to try to curb the price spikes. Inflation has since cooled from its four-decade high of 9.1%, and the central bank is widely expected to begin cutting interest rates in September.
“The big picture is that inflation pressures have moderated over the last two years but are still a bit stronger than the Fed would like them to be,″ said Bill Adams, chief economist at Comerica Bank. ”With the economy operating in low gear, the Fed thinks the right time to start cutting interest rates is close. But they are planning to cut gradually.″
Rate cuts by the Fed would likely lead, over time, to lower borrowing costs for mortgages, auto loans and credit cards as well as business borrowing, and could also boost stock prices.
A brief pickup in inflation early this year had caused Fed officials to scale back their expectations for interest rate cuts. The policymakers said they would need to see several months of mild price increases to feel confident enough to cut their key rate from its 23-year high.
Even as inflation slows by most measures, the costs of food, rent, health care and other necessities remain much higher than they were before the pandemic — a source of public discontent and a potential threat to President Joe Biden’s re-election bid.
Yet despite the lingering inflation pressures and higher borrowing costs, the U.S. economy remains steady, if gradually slowing. Hiring is still solid. And unemployment remains relatively low, giving Americans unusual job security.
veryGood! (8372)
Related
- Lady Gaga Joins Wednesday Season 2 With Jenna Ortega, So Prepare to Have a Monster Ball
- How Pink’s Kids Are Shaping Up to Be Rockstars Like Their Mom
- Topeka was at the center of Brown v. Board. Decades later, segregation of another sort lingers
- Stock market today: Asian shares advance after another round of Wall St records
- Mariah Carey's Amazon Holiday Merch Is All I Want for Christmas—and It's Selling Out Fast!
- North Carolina bill forcing sheriffs to aid immigration agents still under review in House
- All eyes are on Coppola in Cannes. Sound familiar?
- North Carolina revenue decline means alternate sources for voucher spending considered
- Brittany Cartwright Defends Hooking Up With Jax Taylor's Friend Amid Their Divorce
- Three is a crowd: WA governor race will no longer have 3 identical names on the ballot
Ranking
- Brianna LaPaglia Addresses Zach Bryan's Deafening Silence After Emotional Abuse Allegations
- Why Beyoncé’s Cowboy Carter Isn’t Nominated at 2024 ACM Awards
- Aldi recalls cream cheese spreads sold in 28 states due to possible salmonella contamination
- Killer whales attack and sink sailing yacht in the Strait of Gibraltar — again
- Chrysler recalls over 200k Jeep, Dodge vehicles over antilock-brake system: See affected models
- Bring Home the Vacay Vibes With Target’s New Summer Decor Drop, Including Essentials Starting at $3
- Watch: Navy class climbs greasy Herndon Monument after two-hour struggle in freshman ritual
- Ship that struck Baltimore bridge had 4 blackouts before disaster. Here’s what we know
Recommendation
-
Wendi McLendon-Covey talks NBC sitcom 'St. Denis Medical' and hospital humor
-
The 15 new movies you'll want to stream this summer, from 'Atlas' to 'Beverly Hills Cop 4'
-
Rory McIlroy dealing with another distraction on eve of PGA Championship
-
Blinken visits Ukraine, says U.S. weapons will make a real difference as Russia pushes new offensive
-
Patrick Mahomes Breaks Silence on Frustrating Robbery Amid Ongoing Investigation
-
Slovak politicians call for calming of political tensions after shooting of prime minister
-
Rory McIlroy not talking about divorce on eve of PGA Championship
-
Man pleads guilty in theft of Arnold Palmer green jacket other memorabilia from Augusta