Washington - The gain in US wholesale prices reflected higher food and services costs, signaling modest inflation, a Labour Department report showed on Thursday in Washington.
Highlights of producer prices (June)
Producer-price index rose 0.1% (est. 0.0%) after no change the previous month PPI 2% from a year earlier after a 2.4% gain in the prior 12-month period. Excluding food and energy, gauge rose 0.1% from previous month and was up 1.9% from June 2016
Key takeaways
Almost 80% of the increase in wholesale prices was due to a 0.2% gain in services as goods costs edged up 0.1%. A big factor behind the pickup in services costs was a 4% rise in prices for securities brokerage and investment advice.
Otherwise, price pressures in the production pipeline remain contained, keeping broader inflation below the Federal Reserve’s goal and helping explain why policy makers plan to raise interest rates only gradually.
The PPI excluding food, energy, and trade services - a measure some economists prefer because it strips out the most volatile components - increased 2% from June 2016, also indicating inflation is taking time to pick up.
Other details
Excluding the volatile categories of food, energy, and trade services, producer costs rose 0.2% from the previous month following a 0.1% decline. Energy prices fell 0.5% from the prior month; food costs rose 0.6%.
Goods inflation crept higher after falling 0.5% in May; services
prices also climbed after a 0.3% advance
Profit margins at trade services including retailers and wholesalers
were down 0.2%.
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