US Producer Prices Rise in June

U.S. producer prices rose more than expected in June with gains across most categories, indicating some inflation at the factory gate.

The Labor Department said on Wednesday its producer price index for final demand increased 0.4 percent, reversing May’s 0.2 percent decline.

Economists polled by Reuters had forecast prices received by the nation’s farms, factories and refineries rising 0.2 percent.

The government revamped the PPI series at the start of the year to include services and construction. The new series was viewed as an alternative measure of economy-wide inflation.

But big swings in prices received for trade services, a gauge of margins for retailers and wholesalers, have injected volatility into the series and made it difficult to get a clear read on producer inflation. Through the volatility, however, producer prices maintained a firmer bias.

In the 12 months through June, producer prices increased 1.9 percent after rising 2.0 percent in May.

Wholesale food prices slipped 0.2 percent, declining for a second straight month. Gasoline prices increased 6.4 percent, the largest gain since September 2012.

Prices received for services at the final demand level rose 0.3 percent after falling 0.2 percent in May.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza