Wholesale prices shoot up near-record 11.3% in June on surge in energy costs

According to the Bureau of Labor Statistics, June’s inflation was severe at wholesale levels. Producer prices rose by a record amount compared with a year earlier due to the big rise in energy costs.

The Producer Price Index, which measures final demand product prices, rose 11.3% over a previous year, the highest level since record setting 11.6% in March.

A mere 10% of this gain was caused by an increase in final energy costs. Prices for natural gas, oil and other products rose during the month.

Core PPI increased 6.4% in 12 months, not including energy or food and trade services prices. This is a decrease from the 6.8% gain recorded in May.

Core measure only increased 0.3% on a monthly basis. This is less than the 0.5% Dow Jones estimate. Headline PPI rose 1.1% for the month, more than the 0.8% estimation.

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This release is one day after BLS announced that consumer prices index (which measures final-sale price in the market) rose 9.1%. It was the largest 12-month increase since November 1981.

A separate Labor Department report showed that weekly jobless claims rose by 244,000 in the week ending July 9. This is the highest level since November 20, 2021. The weekly number of continuing claims fell by 41,000. This is a drop from the headline figure.

Although there have been signs that the job market may be slowing down, inflation has been the main focus.

Although energy and food costs have been especially high, the June reports indicate that prices are increasing.

There were a few optimistic signs in the PPI report — prices for chicken eggs, for instance, tumbled 30.2%, while iron and steel scrap prices were off 10.4%.

Federal Reserve officials expect to continue pushing for higher interest rates to help bring inflation back to their long-term 2% goal.

After the CPI report, traders priced in an 86% probability that the central bank would raise benchmark interest rates one percentage point at its next meeting. This would mark the highest such rise since the 1980s.

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