Wholesale inflation improved as energy prices fell last month — but relief may be temporary
By Elisabeth Buchwald, CNN
(CNN) — Inflation at the wholesale level cooled last month, helped by a sharp drop in energy prices, according to data released Wednesday by the Bureau of Labor Statistics.
On an annual basis, the Producer Price Index, which measures the prices businesses receive for their goods and services, slowed at a 5.5% pace in June, compared to a revised 6% in May.
On a monthly basis, prices fell 0.3% in June versus a 0.6% increase in the prior month.
Excluding volatile food and energy prices, core PPI slowed to a pace of 4.6% in June from the 4.9% pace seen in May.
Wholesale prices do not typically translate one for one into higher prices for consumers, but they can raise the likelihood that businesses will pass along some of those costs, especially if elevated expenses persist.
While the decline in energy prices provided some relief to businesses last month, that could prove short lived now that the conflict in the Middle East has reignited.
After Tuesday’s similarly positive Consumer Price Index report came out, Federal Reserve Chairman Kevin Warsh said he wasn’t reading too much into it.
“It’s one data point,” he told lawmakers on Tuesday during his semiannual testimony to Congress. “There might be some that look at this morning’s data and say, ‘Oh, mission accomplished. Everything is swell.’ That is not my view.”
This is a developing story and will be updated.
The-CNN-Wire
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