Wholesale prices shoot up near-record 11.3% in June on surge in energy costs

Inflation hit hard at the wholesale level in June, as producer prices surged a near-record amount from a year ago due to a big jump in energy costs, the Bureau of Labor Statistics reported Thursday.

The producer price index, a measure of the prices received for final demand products, increased 11.3% from a year ago, the highest reading since the record 11.6% in March.

Of that gain, almost 90% came from a 10% increase in final demand energy costs as prices for oil, natural gas and other products soared during the month.

Excluding energy, as well as food and trade service prices, so-called core PPI rose 6.4% on a 12-month basis, a deceleration from the 6.8% gain in May.

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On a monthly basis, the core measure increased just 0.3%, below the 0.5% Dow Jones estimate. Headline PPI rose 1.1% on the month, higher than the 0.8% estimate.

The release comes one day after the BLS reported that the consumer price index, which measures final-sale prices in the marketplace, surged 9.1%, the highest 12-month gain since November 1981.

In a separate Labor Department report, weekly jobless claims rose to 244,000 for the week ended July 9, the highest number since Nov. 20, 2021. Continuing claims, which run a week behind the headline number, fell to 1.33 million, a decline of 41,000.

While there are signs the jobs market is weakening, the focus has been on inflation.

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Energy and food prices have been particularly burdensome, but the June reports show price pressures are broadening.

There were a few optimistic signs in the PPI report — prices for chicken eggs, for instance, tumbled 30.2%, while iron and steel scrap prices were off 10.4%.

However, Federal Reserve officials are expected to keep pressing forward on interest rate hikes to bring inflation down closer to their longer-run 2% goal.

Following the CPI release, traders were pricing in an 86% chance the central bank, at its meeting later this month, will raise benchmark interest rates by a full percentage point. That would be the largest such increase since the early 1980s.

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