Financial services push US wholesale prices up in June

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Washington

Rising costs for financial services including stock trading helped nudge US wholesale inflation higher in June, but there were persistent signs of slack price pressures, the Labor Department reported. The new numbers come as the US central bank says it expects to stick to a course of gradual interest rate increases despite persistently weak inflation. The Producer Price Index, which tracks the domestic costs of wholesale goods and services, rose 0.1 percent in June after a flat May. The result surprised analysts, who had instead expected a decline of 0.1 percent in light of falling fuel prices. Still, the less volatile 12-month measure slowed sharply to just two percent, down four-tenths from May. Excluding the more volatile food and fuel categories, PPI also rose 0.1 percent for the month and 1.9 percent compared to June of last year. Prices for financial services, including securities brokerage and investment advice, rose a sharp four percent.
Among other gainers, air freight transportation rose 2.6 percent, the largest gain since December, and the cost of shipping goods on trucks rose 0.3 percent. But there were some significant price drops as well: warehousing and storage costs had their sharpest decline in nearly seven years, sinking 1.6 percent. Energy prices continued to drop, with wholesale gasoline down 1.1 percent, diesel falling 1.2 percent and liquefied petroleum gas dropping 5.9 percent. Prices for raw cotton saw and plastic resins posted the biggest monthly declines in nearly two years, falling 6.4 percent and 2.5 percent respectively.—AFP