Wholesale prices rose modestly in June, slightly beating expectations, as Wall Street ponders when the Federal Reserve might be inclined to cut interest rates.
The Bureau of Labor Statistics reported Friday that the producer price index (PPI) rose 0.2% last month. That was higher than the 0.1% increase economists surveyed by Dow Jones had expected. On a year-over-year basis, the PPI rose 2.6%.
The PPI measures the prices producers receive for their goods and services in the marketplace. In June, the index’s rise was driven by higher service costs, which offset a decline in goods prices.
This reading was an improvement over the May figures, which were also revised higher. The latest report showed that the May PPI was unchanged, in contrast to the 0.2% decline initially reported.
Despite a higher-than-expected PPI, recent data have shown a general decline in inflation, with more emphasis usually placed on consumer price inflation metrics by economists and investors.
This report follows Thursday’s release of the June Consumer Price Index (CPI), which showed a lower-than-expected rate of inflation. The CPI revealed that headline inflation declined on a monthly basis and now stands at 3% year-over-year.
The Federal Reserve’s next policy meeting is scheduled for late July, with expectations that they will keep current interest rates. However, many traders are increasingly looking at the September meeting as a potential date for the first rate cut.
The Fed’s preferred gauge of inflation, the Personal Consumption Expenditures (PCE) Price Index, will be released on July 26.
