A gauge of wholesale prices rose more than expected in June as Wall Street weighed when the Federal Reserve would feel comfortable cutting interest rates.
The Labor Department’s Bureau of Labor Statistics reported Friday that the producer price index rose 0.2% last month. Economists polled by Dow Jones had expected the index to rise 0.1%. The producer price index is now up 2.6% over the past year.
The Producer Price Index is a measure of the prices that producers can get for their goods and services in the open market. In June, rising prices for services offset falling prices for goods.
The reading represents an increase from the May figure, which was also revised upward. The index was unchanged in May compared to a 0.2% decline in the original release, a report said on Friday.
The higher-than-expected PPI reading contrasts with recent data showing inflation has been falling, although economists and investors tend to place more weight on consumer-focused inflation readings.
Friday’s report comes after the June consumer price index came in cooler than expected on Thursday. The CPI actually showed that headline inflation fell on a monthly basis and is now holding steady at 3% on an annual basis.
The central bank is due to hold its next monetary policy meeting at the end of July, when it is widely expected to keep interest rates on hold. Traders increasingly see the September meeting as the most likely time for a first rate cut.
The Fed's preferred inflation reading is the personal consumption expenditures price index. The June PCE data is due out on July 26.
