US producer prices barely increased in June from a year earlier, rising at the slowest pace in nearly three years and extending a months-long deceleration in pipeline inflationary pressures.
The producer price index for final demand rose 0.1% from a year earlier, according to data out Thursday from the Bureau of Labor Statistics. On a monthly basis, the PPI also increased 0.1% after falling in the prior month.
Normalizing global supply chains, stabilizing commodity prices, and a broader shift in consumer demand toward services and away from goods have generally helped alleviate inflationary pressures at the producer level.
Services costs edged higher despite a sharp decline in transportation and warehousing costs. Prices of goods, meanwhile, were little changed. That's flowed through to consumers in the form of lower prices -- something known as deflation. Goods costs fell 4.4% from a year ago, the biggest decline in more than three years.
Excluding the volatile food and energy components, the so-called core PPI also barely rose from May and was up 2.4% from a year ago. The annual gain was the smallest since January 2021.
The figures come just a day after separate data showed consumer prices rose in June at the slowest pace since 2021. While a July interest-rate hike is all but assured, the rapid descent in price growth -- now just a third of its 2022 peak rate -- offered fresh hope that the Federal Reserve can soon wrap up the most aggressive tightening campaign in decades.
Source: Bloomberg
