U.S. Producer Prices Unexpectedly Flat In June, Annual Growth Slows More Than Expected

(RTTNews) - A report released by the Labor Department on Wednesday showed producer prices in the U.S. unexpectedly came in flat in the month of June.

The Labor Department said its producer price index for final demand was unchanged in June after rising by an upwardly revised 0.3 percent in May.

Economists had expected producer prices to rise by 0.2 percent compared to the 0.1 percent uptick originally reported for the previous month.

The report also said the annual rate of producer price growth slowed to 2.3 percent in June from an upwardly revised 2.7 percent in May.

The annual rate of producer price growth was expected to edge down to 2.5 percent from the 2.6 percent originally reported for the previous month.

"Disinflation remains, but the Fed will be undeterred in keeping rates steady until September," said Jamie Cox, Managing Partner for Harris Financial Group.

"As long as the labor market remains strong and resilient, rates aren't likely to move meaningfully lower, and that's a good thing," he added. "Inflation has hurt millions of Americans and being able to focus on that was needed."

Producer prices came in flat in June as prices for services edged down by 0.1 percent, offsetting a 0.3 percent increase in prices for goods.

The dip in prices for services came as prices for transportation and warehousing services slumped by 0.9 percent. Prices for trade services were unchanged and prices for other services slipped by 0.1 percent.

Meanwhile, over half of the increase in prices for goods can be traced to prices for goods less food and energy, which climbed by 0.3 percent.

The report said price for energy also rose by 0.6 percent during the month, while prices for food edged up by 0.2 percent.

The Labor Department also said core producer prices, which exclude prices for food, energy and trade services, were unchanged in June after inching up by 0.1 percent in May.

The annual rate of growth by core producer prices slowed to 2.5 percent in June from 2.8 percent in May.

A separate report released by the Labor Department on Tuesday showed consumer prices in the U.S. increased in line with economist estimates in the month of June.

The report said the consumer price index rose by 0.3 percent in June after inching up by 0.1 percent in May.

The annual rate of consumer price growth accelerated to 2.7 percent in June from 2.4 percent in July. Economists had expected the price of growth to rise to 2.6 percent.

The Labor Department also said the core consumer price index, which excludes food and energy prices, edged up by 0.2 percent in June after creeping up by 0.1 percent in May. Core prices were expected to increase by 0.3 percent.

The report said the annual rate of core consumer price growth ticked up to 2.9 percent in June from 2.8 percent in May, in line with economist estimates.