Expensive Gas Pushes Producer Prices Higher
The Producer Price Index for finished goods increased by a seasonally adjusted 0.8% for June, according to a Labor Department report (link opens as PDF) released today.
After falling 0.7% in April and increasing 0.5% in May, this latest report adds on a second straight month of price hikes for producers. Analysts had expected another increase but, as with May, their 0.5% estimate proved too conservative.
While overall price gains were much larger than expected, most of the movement originated with volatile energy prices. A 7.2% jump in gasoline prices pushed overall finished energy goods to a 2.9% gain. Food also moved up a slight 0.2%, marking its eighth straight month of increases.
Excluding food and energy, producer price increases matched analyst expectations of a more modest 0.2% growth. Passenger car prices were the main driver behind this bump, up 0.8% for June.
Moving back along the supply chain, prices for intermediate goods are up 0.5% after three months of declines, while crude good costs remained steady.
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