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A measure of underlying U.S. producer prices increased in June by more than forecast, driven by trade services and indicating inflation may be starting to stabilize.
Excluding food and energy, producer prices increased 2.3% in June from a year earlier, matching the prior month’s annual advance and more than the median forecast of 2.1%, a Labor Department report showed July 12. The overall producer-price index rose 0.1% for a second month, also exceeding expectations for no change.
The data follow a report July 11 showing consumer prices also picked up, which may complicate Fed policymakers’ decision on interest-rate policy later this month. The stronger figures indicate companies are seeing at least some inflation that could filter through to the broader economy.
Final demand services rose in June by the most since October 2018. Trade indexes measure changes in margins received by wholesalers and retailers. Retail margins for fuels surged by the most since November, while margins also picked up at wholesalers of machinery and at retailers of health and beauty products and apparel and footwear.
Core consumer inflation topped expectations in separate data released July 11, showing that the index that excludes food and energy rose the most since January 2018. There were gains across categories, from shelter to clothing and used vehicles.