The Labor Department reports on USA producer price inflation in June on Wednesday, July 15, 2015. The gains for the goods sector were even stronger.
Advertisement
The report said import prices edged down by 0.1 percent in June following a 1.2 percent increase in May.
Last month, gasoline prices increased 4.3 percent after surging 17 percent in May. Goods prices likely rose solidly in June, but by less than they did in May.
Prices for non-agricultural exports also edged down by 0.1 in June after climbing by 0.7 percent in the previous month.
In June, manufacturing output was unchanged: The output of motor vehicles and parts fell 3.7%, but production elsewhere in manufacturing rose 0.3%. June consumer price data will be published on Friday.
“When they’re rising at a 58,000 percent annualized rate, as they have the past two months, the impact is material”, said Ted Wieseman, an analyst at Morgan Stanley who estimates that eggs alone account for almost a fifth of the total 0.4 percent increase in producer prices last month.
The Labor Department said its producer price index for final demand increased 0.4 percent last month after increasing 0.5 percent in May.
Compared to the same month a year ago, import prices were down by 10.0 percent in June, while export prices were down by 5.7 percent. This represents a slower pace of decline than the 1.3 percent decrease observed in April, and yet, we have seen negative year-over-year numbers each month so far this year.
Along those lines, core inflation – which excludes food and energy costs – was 0.8 percent in June, up from 0.6 percent in May but down from 2.0 percent in December.
A plunge in crude oil prices and a resurgent dollar have subdued producer inflation and dampened overall domestic price pressures.
The dollar has gained 11.6 per cent against the currencies of the United States’ main trading partners since June 2014 on expectations the Federal Reserve will raise interest rates this year.
Advertisement
Chad Moutray is the chief economist, National Association of Manufacturers. What matters for financial conditions and the broader economy is the entire expected path of interest rates, not any particular move, including the initial increase, in the federal funds rate.
