The Bureau of Labor Statistics said that producer prices for final demand goods and services edged up 0.1 percent in June, accelerating ever-so-slightly after being unchanged in May. For manufacturers, producer prices for final demand goods rose by 0.2 percent, rebounding from a decline of 0.1 percent in the prior release. The gain stemmed largely from increased food prices, up 1.2 percent, led by higher costs for dairy, grains and meats. At the same time, energy prices pulled back for the second straight month, down 0.6 percent. On a year-over-year basis, final demand food and energy costs have risen 1.2 percent and 4.3 percent, respectively. Excluding food and energy, producer prices for final demand goods were also up 0.1 percent.
Overall, producer prices for final demand goods and services have increased 2.0 percent since May 2016, continuing to ease from April’s 2.5 percent year-over-year pace, which was the fastest pace since February 2012. That represents a notable acceleration in inflationary pressures after being unchanged in August, and yet, this latest figure suggests that the pickup has stabilized, at least for now. In a similar way, core producer prices – which exclude food, energy and trade services – have grown 2.1 percent over the past 12 months, the same rate as seen in both April and May.