U.S. PPI Rose 0.4% in June, Topping Views on Strong Final Demand Goods Performance

June MoM PPI 0.4% vs 0.2% Expected, Ex-Food Energy 0.3% vs 0.1%

UPDATE - More from the Bureau of Labor Statistics:

The Producer Price Index for final demand advanced 0.4 percent in June, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.5 percent in May and declined 0.4 percent in April. On an unadjusted basis, the final demand index moved down 0.7 percent for the 12 months ended in June, the fifth straight 12-month decrease.

In June, nearly two-thirds of the increase in the final demand index can be attributed to prices for final demand goods, which rose 0.7 percent. The index for final demand services advanced 0.3 percent.

Within intermediate demand, prices for processed goods climbed 0.7 percent, the index for unprocessed goods jumped 1.2 percent, and prices for services moved up 0.4 percent.

Final Demand

Final demand goods: The index for final demand goods moved up 0.7 percent in June after rising 1.3 percent a month earlier. Almost 60 percent of the broad-based advance in June is attributable to prices for final demand energy, which climbed 2.4 percent. The indexes for final demand goods less foods and energy and for final demand foods increased 0.4 percent and 0.6 percent, respectively.

Product detail: Thirty percent of the June advance in prices for final demand goods can be traced to the gasoline index, which rose 4.3 percent. Prices for chicken eggs, pharmaceutical preparations, residential electric power, residential natural gas, and cigarettes also moved higher. In contrast, the index for fresh and dry vegetables fell 6.0 percent. Prices for liquefied petroleum gas and electronic computers also decreased.

Final demand services: The index for final demand services moved up 0.3 percent in June following no change in May. Over half of the broad-based advance can be traced to a 0.2-percent increase in the index for final demand services less trade, transportation, and warehousing. Margins for final demand trade services rose 0.2 percent, and the index for final demand transportation and warehousing services advanced 0.6 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: Thirty percent of the June increase in the index for final demand services can be attributed to prices for loan services (partial), which climbed 2.4 percent. The indexes for machinery and equipment wholesaling, fuels and lubricants retailing, truck transportation of freight, deposit services (partial), and portfolio management also moved higher. Conversely, margins for food and alcohol wholesaling declined 3.7 percent. The indexes for traveler accommodation services and passenger car rental also declined.

Special grouping, Final demand less foods, energy, and trade:  The index for final demand less foods, energy, and trade services rose 0.3 percent in June after edging down 0.1 percent in May. For the 12 months ended in June, prices for final demand less foods, energy, and trade services increased 0.7 percent.

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