The Bureau of Labor Statistics reported that producer prices for finished goods were up 0.1 percent in June, its first increase since February. In June finished energy goods were down 0.9 percent. This follows declines of 1.1 percent, 1.4 percent, and 4.3 percent in March through May. Clearly, businesses have benefited from lower petroleum prices of late, as has the consumer. The June consumer price index data will be released on Tuesday, July 17.)
Core prices – which exclude food and energy costs – rose 0.2 percent in June, and have risen 2.6 percent over the course of the past year. Food prices continue to rise, up 0.5 percent for the month. (The recent news about corn yields should produce even higher food costs in the months ahead.) On the positive side, the core rate has fallen since February as petroleum prices have dropped; the year-over-year rate was 3.1 percent in January, for instance.
Manufacturers continue to see an easing of raw material prices, benefitting from lower energy costs. Producer prices within the industry fell 0.7 percent, bringing the year-over-year rate down to just 0.6 percent. In January, the year-over-year rate was 5.4 percent. Producer prices were mostly down in the various manufacturing sectors.
The largest declines were seen in petroleum and coal products (not surprisingly, down 4.2 percent) and primary metals (down 1.4 percent). The furniture sector had the greatest monthly gain, up 0.3 percent. There were a number of industries with 0.1 percent gains in monthly prices, including machinery, electrical equipment and appliances, transportation equipment, and wood products.
Chad Moutray is chief economist, National Association of Manufacturers.
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