US PPI: Pressures soften in June - Wells Fargo

According to analysts from Wells Fargo, the Producer Price Index in June rose in line with expectations, with gain for goods and services. They reflected that the annual rate softened, but still remains near cycle highs.

Key Quotes: 

“Reflecting a 0.1 percent monthly rise in goods prices and a 0.2 percent increase in services prices, the PPI for final demand edged higher in June, following a flat performance in May. 

“Nearly 80 percent of the rise in PPI final demand was accounted for by the increase in services prices, which, in turn, was led by an outsized 4 percent gain in securities, brokerage, dealing, investment advice and related services.

“Our preferred measure of core PPI (excluding energy, food and trade services) rose 0.2 percent on the month and 2.1 percent on the year. Prices further back in the production pipeline were mixed, suggesting any upward pressures to the near-term inflation outlook remain tame. We expect inflation pressures to firm in the second half of the year, but any realized gains are likely to be limited.”