Factory gate inflation surpasses forecasts in June

Factory gate inflation in the US increased last month by more than had been expected, led by a surge in energy prices.

The headline total final demand producer price index advanced by 0.5% month-on-month in June, according to the Department of Labour, and by another 0.3% in comparison to a year ago.

Analysts had been expecting a rise of 0.3% for the monthly pace of increase and an unchanged reading versus a year prior.

The ‘core’ PPI rate, which excludes the more volatile food and energy categories, also rose by 0.3% (consensus: 0.1%) in comparison to May, and rose by 0.9% in comparison to a year ago (consensus: 1.0%).

Final goods prices rose by 0.8% month-on-month (Food: 0.9%; Energy: 4.1%) and those for services by another 0.4%.