US producer prices increase in June driven by service costs
Date
7/14/2024 5:47:08 AM
(MENAFN) Official data from the U.S. labor Department revealed that producer prices in the United States increased more than anticipated in June, primarily due to rising service costs. The Producer Price Index (PPI) rose by 0.2 percent last month, with a revision upwards of the initially reported decline in May. Year-on-year, producer prices climbed 2.6 percent in June, marking the highest annual growth rate since March 2023, when it reached 2.7 percent.
These figures follow a recent report showing a slower-than-expected rise in consumer price inflation, which has heightened expectations of a potential interest rate cut by the U.S. Federal Reserve as early as September. The Federal Reserve has been actively striving to stabilize inflation rates, aiming to bring them back to their long-term target of 2 percent by maintaining higher interest rates. Fed Chairman Jerome Powell acknowledged "slight progress" in this endeavor recently.
In detail, the June increase in producer prices was largely driven by a 0.6 percent uptick in service prices, compared to a 0.3 percent growth in May. The core service price index, which excludes trade, transportation, and storage services, also saw a modest rise of 0.1 percent. Conversely, commodity prices declined by 0.5 percent on a monthly basis in June, following a 0.8 percent drop in May, with energy prices showing the largest contraction at 2.6 percent.
The data underscores ongoing economic dynamics in the U.S. market, where policymakers continue to monitor price movements closely amidst efforts to achieve sustainable economic growth and stable inflation levels.
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