EmailAfter contracting for three consecutive months, including a 1.0% drop in May, headline producer prices increased 0.1% in June. The Briefing.com consensus expected the PPI to fall 0.6%. Energy prices fell only 0.9% in June. That was the smallest monthly decline since energy prices started falling in March. Seasonal adjustments were partially responsible for the relatively lackluster drop.
After falling 0.6% in May, food prices rose 0.5% in June. That was the largest monthly gain since increasing 1.0% in November 2011. With drought conditions intensifying, spot prices for most major agricultural staples have spiked. That will keep upward pressure on food costs for the next few months. Excluding food and energy, core prices increased 0.2% for the fourth consecutive month. Just about all of the increase in core costs was the result of a 1.4% increase in light motor truck prices. Pipeline pressures remained low. Core intermediate goods prices fell 0.7% in June, which is the second consecutive monthly decline. Core crude goods prices dropped 4.0%, marking the third consecutive monthly decline.
