Wholesale prices unexpectedly declined 0.3% in June on big drop in gasoline

Wholesale prices unexpectedly fell in June as sliding energy costs helped brighten the inflation picture, the Bureau of Labor Statistics reported Wednesday.

The produce price index posted a seasonally adjusted 0.3% decline for the month, compared to the Dow Jones consensus estimate for the final-demand cost measure to be unchanged. On an annual basis, the index indicated a 5.5% inflation rate. The May reading was revised sharply lower, from an initially reported increase of 1.1% to 0.6%.

Excluding food and energy, core PPI rose 0.2%, against the outlook for a 0.3% increase. Core PPI less trade services rose 0.1% and was up 5.1% from a year ago.

As with consumer prices, the index benefited from easing energy costs, particularly as oil fell due to the brief pause in tensions between the U.S. and Iran. Goods prices posted a 1.4% monthly decline, the biggest drop since July 2022 as energy slumped 6.4% and final demand food prices were off 0.6%.

Within the goods category, gasoline tumbled 12%, accounting for about two-thirds of the monthly decrease.