News
Wholesale prices unexpectedly fell 0.2% in May
Excluding food, energy and commercial services, the PPI was unchanged, compared to expectations for a 0.3% increase.
On an annual basis, the PPI of all items increased by 2.2%.
Stock futures market saw some modest gains following the report, while Treasury yields fell.
The launch comes one day after the BLS reported that the consumer price indexa widely watched inflation indicator that measures what consumers actually pay for goods and services, remained unchanged for the month.
From a wholesale perspective, the PPI was held back by a 0.8% drop in final demand goods prices, which was the biggest drop since October 2023. Within the category, the energy index fell 4.8%. Food prices fell 0.1%.
On the services side, retail margins for fuels and lubricants increased by 12.2%, but this was partially offset by a 4.3% drop in prices for air passenger transport services.
The launch takes place one day after the Federal Reserve noted ‘modest progress’ in bringing inflation back to its 2% target, but not enough for the central bank to start lowering interest rates. The Fed has maintained its benchmark interest rate in a target range of 5.25%-5.5% since July 2023 as it awaits further evidence that inflation is returning to the central bank’s 2% target.
In other economic news on Thursday, the Labor Department reported that initial unemployment insurance claims jumped to 242,000 in the week ending June 8. This is the highest level since August 2023 and an increase of 13,000 from the previous period. Economists consulted by Dow Jones were looking for 225 thousand.
Continuing claims, one week behind, totaled 1.82 million, an increase of 30,000 from the previous week.