WASHINGTON (MNI) -- The U.S. June producer price data continued to meander, and it is perhaps more meaningful to focus on the fact that these inflation measures remain modest in a broad sense.
June PPI posted +0.4%, and core (final demand less food & energy) +0.1%. These were higher and lower than expected, respectively.
But the over-the-year pace for PPI now is +1.9% overall and +1.8% core, a better indication of slow inflation that remains contained.
Services and goods prices both rose but many components continue a meaningless seesaw that is more a reflection of the new measurement techniques for PPI than of underlying changes in inflation. This is illustrated best in the overall PPI, which posted modest gains for the first three months of the year, only to deteriorate into a surge in April, a drop in May, and a rebound in June.June food prices fell 0.2% on drops in grains, cheese, and poultry.
Energy posted +2.1% as gasoline prices jumped 6.4%. Elsewhere, pharmaceuticals and cigarettes, financial services, and air services prices jumped. Residential real estate loan and machinery margins fell this month. Unprocessed goods prices for intermediate demand were down 0.9% in an indication that input prices pressures are contained.