Wholesale prices fall 0.3% in June as gas prices drop 12%

Core PPI rises 0.2%, missing economist forecasts of 0.3%

The Bureau of Labor Statistics on Tuesday reported that the Producer Price Index for seasonally adjusted final demand declined 0.3% in June, reversing two months of gains. The index had risen 0.6% in May and 1.1% in April, the BLS said.

The decline was driven by falling energy prices. A 12% drop in gasoline prices accounted for two-thirds of the overall decrease, the bureau said. The index for final demand energy fell 6.4% in June, while within processed goods for intermediate demand, processed energy goods declined 7.3%.

Excluding the volatile food and energy categories, core producer prices rose 0.2% in June, a figure that fell short of the 0.3% increase economists had projected, according to the BLS data.

The index for final demand goods fell 1.4% in June, the largest decrease in that category since July 2022, when it declined 1.9%. The BLS said the overall decline “can be attributed to” the 1.4% decrease for final demand goods.

On the services side, the index for final demand services increased 0.2% in June, a slower pace than the 0.3% rise recorded in May. The bureau attributed 60% of the increase in final demand services to a 0.4% rise in final demand trade services. Fuel and lubricant retailing accounted for about half of the increase in final demand services, the BLS said.

On an annual basis, the producer price index for final demand rose 5.5% through June on an unadjusted basis. The core measure that excludes food, energy, and trade services increased 0.1% in June, bringing its 12-month rate to 5.1%.