US Producer Prices Increase in June to Near Record High

U.S. producer prices increased in June by more than a percentage point as businesses felt the pinch of rising inflation, according to a report by the Bureau of Labor Statistics (BLS).

The Labor Department’s producer price index (PPI) rose 1.1% in June, which is above an expected increase of 0.8%. This follows an increase of 0.9% in May. On a year-over-year basis, the index jumped 11.3% in June, which is the largest increase since March’s record 11.6% rise, and above forecasts for 10.7%.

A 2.4% rise in goods prices accounted for three-quarters of the increase in the PPI. Goods prices gained 0.4% in May. Nearly 90% of June’s rise in goods prices was attributed to a 10% jump in energy prices.

Over half of the June increase in the index for final demand goods is attributable to gasoline prices, which jumped 18.5%. The indexes for diesel fuel, electric power, residential natural gas, motor vehicles and equipment also moved higher.

Prices for fabricated structural metal products were up from May’s PPI report. That index is up 0.6% in June and 26.2% from a year ago. The index for ornamental and architectural metal product work increased by 0.9% from May and 31.5% from June 2021.

The PPI for metal windows reported no increase; however, the year-over-year numbers still remain high at 31.9%. The price for metal doors and frames is up 0.7% in June and 31.8% from a year ago.

The cost of builders’ hardware, which includes door and window hardware, is up 0.2% and remains up 11.3% from this past June.

The PPI measures the change in prices for goods paid to U.S. producers of goods and services. It also is a measure of wholesale inflation. The PPI is considered the business version of the consumer price index. Consumer prices also increased in June, rising at a 9.1% annual pace, the highest rate since 1981.