The US Bureau of Labor Statistics reports that in June, the Producer Price Index (PPI) for final demand was unchanged, following a 0.3% rise in May. Over the past year, the index rose 2.3%. Goods prices increased 0.3%, driven by gains in energy and core goods, while services prices fell 0.1%, led by a drop in traveler accommodation. Core PPI (excluding food, energy, and trade services) was flat in June but up 2.5% over the year, signaling steady but moderate inflation. They write:
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent on a seasonally adjusted basis in June, after rising 0.1 percent in May, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.7 percent before seasonal adjustment.
The index for shelter rose 0.2 percent in June and was the primary factor in the all items monthly increase. The energy index rose 0.9 percent in June as the gasoline index increased 1.0 percent over the month. The index for food increased 0.3 percent as the index for food at home rose 0.3 percent and the index for food away from home rose 0.4 percent in June.
The index for all items less food and energy rose 0.2 percent in June, following a 0.1-percent increase in May. Indexes that increased over the month include household furnishings and operations, medical care, recreation, apparel, and personal care. The indexes for used cars and trucks, new vehicles, and airline fares were among the major indexes that decreased in June.
The all items index rose 2.7 percent for the 12 months ending June, after rising 2.4 percent over the 12 months ending May. The all items less food and energy index rose 2.9 percent over the last 12 months. The energy index decreased 0.8 percent for the 12 months ending June. The food index increased 3.0 percent over the last year.
Intermediate Demand by Commodity Type
Within intermediate demand in June, prices for processed goods edged up 0.1 percent, the index for unprocessed goods rose 0.7 percent, and prices for services declined 0.1 percent. (See tables B and C.)
Processed goods for intermediate demand: The index for processed goods for intermediate demand edged up 0.1 percent in June, the third consecutive increase. The June rise can be attributed to prices for processed energy goods, which advanced 0.6 percent. In contrast, prices for processed foods and feeds declined 0.3 percent, while the index for processed materials less foods and energy was unchanged. For the 12 months ended in June, prices for processed goods for intermediate demand rose 1.9 percent, the largest 12-month advance since increasing 2.1 percent in February 2023.
Product detail: Leading the June increase in prices for processed goods for intermediate demand, the index for natural gas to electric utilities jumped 12.1 percent. Prices for industrial electric power, gasoline, fertilizer materials, and meats also rose. Conversely, the indexes for animal and marine feed, commercial electric power, thermoplastic resins and plastics materials, and particleboard and fiberboard fell.
Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand rose 0.7 percent in June, the largest increase since jumping 5.8 percent in January. Nearly two-thirds of the June advance can be traced to prices for unprocessed energy materials, which moved up 1.4 percent. The index for unprocessed nonfood materials less energy rose 1.1 percent. In contrast, prices for unprocessed foodstuffs and feedstuffs declined 0.2 percent. For the 12 months ended in June, the index for unprocessed goods for intermediate demand fell 1.3 percent.
Product detail: Over half of the June rise in prices for unprocessed goods for intermediate demand is attributable to the index for natural gas, which advanced 5.9 percent. Prices for slaughter cattle, slaughter poultry, carbon steel scrap, slaughter hogs, and coal also increased. Conversely, the index for ungraded chicken eggs dropped 25.0 percent. Prices for aluminum base scrap and for crude petroleum also declined.
Services for intermediate demand: The index for services for intermediate demand inched down 0.1 percent in June after advancing 0.1 percent in May. Leading the decline, prices for services for intermediate demand less trade, transportation, and warehousing fell 0.1 percent. Margins for trade services for intermediate demand decreased 0.3 percent. In contrast, the index for transportation and warehousing services for intermediate demand rose 0.2 percent. For the 12 months ended in June, prices for services for intermediate demand increased 1.4 percent.
Product detail: Within services for intermediate demand in June, prices for deposit services (partial) fell 5.4 percent. The indexes for gross rents for office buildings, business loans (partial), food and alcohol wholesaling, and airline passenger services also moved lower. Conversely, prices for freight forwarding rose 8.0 percent. The indexes for gross rents for retail properties; portfolio management; and hardware, building materials, and supplies retailing also advanced.
Intermediate Demand by Production Flow
Stage 4 intermediate demand: In June, prices for stage 4 intermediate demand were unchanged for the second consecutive month. In June, the index for total goods inputs to stage 4 intermediate demand increased 0.2 percent. In contrast, prices for total services inputs edged down 0.1 percent. (See table D.) Advances in the indexes for industrial electric power, portfolio management, gross rents for retail properties, machinery and equipment parts and supplies wholesaling, and natural gas to electric utilities offset declines in the indexes for gross rents for office buildings; commercial electric power; deposit services (partial); securities brokerage, dealing, and investment advice; and food and alcohol wholesaling. For the 12 months ended in June, prices for stage 4 intermediate demand rose 2.2 percent.
Stage 3 intermediate demand: Prices for stage 3 intermediate demand decreased 0.2 percent in June following a 0.2-percent increase in May. In June, the index for total goods inputs to stage 3 intermediate demand fell 0.4 percent, while prices for total services inputs were unchanged. Declines in the indexes for ungraded chicken eggs, raw milk, deposit services (partial), paper and plastics products wholesaling, thermoplastic resins and plastics materials, and jet fuel outweighed rising prices for slaughter cattle, slaughter poultry, and freight forwarding. For the 12 months ended in June, the index for stage 3 intermediate demand advanced 1.4 percent.
Stage 2 intermediate demand: The index for stage 2 intermediate demand increased 0.2 percent in June, the first advance since moving up 1.9 percent in January. In June, prices for total goods inputs to stage 2 intermediate demand rose 0.6 percent. Conversely, the index for total services inputs decreased 0.2 percent. Increasing prices for natural gas, freight forwarding, maintenance and repair of nonresidential buildings (partial), coal, legal services, and non-corrugated paperboard outweighed declines in the indexes for deposit services (partial), business loans (partial), and natural gas liquids. For the 12 months ended in June, prices for stage 2 intermediate demand fell 1.1 percent, the largest 12-month decrease since moving down 1.9 percent in September 2024.
Stage 1 intermediate demand: The index for stage 1 intermediate demand inched down 0.1 percent in June after advancing 0.1 percent in May. In June, prices for total services inputs to stage 1 intermediate demand fell 0.2 percent. In contrast, the index for total goods inputs rose 0.1 percent. Decreasing prices for traveler accommodation services; airline passenger services; gross rents for office buildings; commercial electric power; and securities brokerage, dealing, and investment advice outweighed increases in the indexes for natural gas to electric utilities; hardware, building materials, and supplies retailing; gross rents for retail properties; and fertilizer materials. For the 12 months ended in June, prices for stage 1 intermediate demand advanced 1.9 percent.
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