A customer looks at meat products at a Safeway supermarket, a subsidiary of Albertsons, in Washington, D.C. on October 27, 2022. The Bureau of Labor Statistics said the producer price index increased faster than expected in June. File Photo by Michael Reynolds/EPA-EFE
July 12 (UPI) — U.S. wholesale prices rose faster than expected in June, likely putting a damper on hopes that the Federal Reserve to cut interest rates at their next meeting.
The produce price index, the gauge of prices that producers can get for their goods and services in the open market, increased a seasonally adjusted 0.2% in June, according to the monthly release by the Bureau of Labor Statistics.
Prices were also up 1.6% from June 2023.
The monthly increase was higher than a 0.1% increase predicted by Dow Jones economistis.
“The June rise in the index for final demand can be traced to a 0.6% increase in prices for final demand services,” said the Bureau of Labor Statistics. “In contrast, the index for final demand goods decreased 0.5%.”
The BLS said “nearly all the June increase” was due to a 1.9% rise in margins for final demand trade services, which measure trade changes in margins received by wholesalers and retailers. The index for services, excluding trade, transportation and warehousing increased 0.1%.
Within final demand goods, the bureau saw a 5.8% decrease in the gasoline sector. Lower prices were also found in residential electric power, diesel fuel, jet fuel, and fresh and dry vegetables. However, the prices for chicken eggs increased by a whopping 55.4%.
The final demand for goods without the more volatile food and gasoline sectors was unchanged from the previous month.
The report comes a day after the bureau said the consumer price index, declined a seasonally adjusted 0.1% in June and 3% for the past 12 months. The index for core items, minus food and energy, increased by 0.1%, lower than the 0.2% it increased in May.