Gain of 11.3% on rising energy costs
Inflation hit the wholesale level hard in June as producer prices rose by a near record amount from a year ago due to a sharp rise in energy costs, the Bureau of Labor Statistics reported Thursday.
The producer price index, a measure of prices received for final demand products, rose 11.3% from a year ago, the highest reading since the record high of 11.6 % in March.
Of that gain, nearly 90% came from a 10% increase in end-demand energy costs, as prices for oil, natural gas and other commodities soared during the month.
Excluding energy, as well as food and commercial services prices, the so-called core PPI rose 6.4% year-on-year, a deceleration from May’s 6.8% gain.
On a monthly basis, the core measure rose just 0.3%, below the Dow Jones estimate of 0.5%. The overall PPI rose 1.1% on the month, above the estimate of 0.8%.
The release comes a day after the BLS reported that the consumer price index, which measures final selling prices in the market, jumped 9.1%, the highest 12-month gain since November. nineteen eighty one.
In a separate Labor Department report, weekly jobless claims rose to 244,000 for the week ended July 9, the highest number since November 20, 2021. Continuing claims, which are a week behind overall number fell to 1.33 million, a drop of 41,000.
Although there are signs that the labor market is weakening, the focus has been on inflation.
Energy and food prices have been particularly heavy, but June reports show price pressures building.
There were some optimistic signs in the PPI report – chicken egg prices, for example, fell 30.2%, while scrap metal and steel prices fell 10.4%.
However, Federal Reserve officials are expected to continue to press interest rate hikes to bring inflation closer to their long-term target of 2%.
Following the CPI release, traders were pricing in an 86% chance that the central bank, at its meeting later this month, will raise benchmark interest rates by a full percentage point. It would be the largest such increase since the early 1980s.