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Producer Prices: Re-acceleration Continued in June

July 11, 2018
Bottom Line: As the global supply chain began to digest US steel and aluminum tariffs put in place earlier this year goods price inflation drove a surprise uptick in producer prices again in June. As markets brace for more tariffs producers are also dealing with shortages in trucking and saw a 1.3% increase in transportation in June. Core prices rose moderately, more than expected, and climbed moderately on a year-over-year basis with core final demand nearly hitting cycle highs. Overall inflationary pressures at the producer level remain moderate but are building.

The PPI ROSE by 0.3% in June, compared with market expectations for an increase of 0.2%. Overall producer prices are 3.3% ABOVE the year ago level.

The Goods PPI ROSE by 0.1% in June and is now 4.3% ABOVE its year ago level. Food prices fell by 1.1% but are now 0.9% BELOW their year ago level. Meanwhile energy prices rose by 0.8%. and are now 17.0% ABOVE their year ago level. The Goods PPI less food and energy ROSE by 0.3%, and is now 2.7% ABOVE its year ago level.

The Services PPI ROSE by 0.4% in June and is now 2.7% ABOVE its year ago level.

The Core PPI ROSE by 0.3%, compared with market expectations for a increase of 0.2%. Core producer prices are now 2.8% ABOVE their year ago level.