PPI for final demand declines 0.3% in June; goods fall 1.4%, services increase 0.2%

June’s Producer Price Index for final demand fell 0.3% m/m, with final goods down 1.4% while final services rose 0.2%. Despite the monthly cooling, prices are still up 5.5% y/y for the 12 months ended in June, keeping inflation pressure elevated. The mixed signal is likely to temper rate-cut optimism and keep bond-market expectations cautious.

Analysis

June’s Producer Price Index for final demand fell 0.3% m/m, with final goods down 1.4% while final services rose 0.2%. Despite the monthly cooling, prices are still up 5.5% y/y for the 12 months ended in June, keeping inflation pressure elevated. The mixed signal is likely to temper rate-cut optimism and keep bond-market expectations cautious.