This morning The U.S. Bureau of Labor Statistics reported that the Producer Price Index for final demand ticked up 0.1% on a seasonally adjusted basis in May, matching expectations for a 0.1% monthly increase. This rise follows a 0.2% increase in April. On an annual basis (unadjusted), the PPI increased 1.8%, coming up short of expectations for a 1.95% annual increase, following a 2.2% annual rate of advance in April
Core PPI -- which excludes volatile food, energy and trade services and is often considered a more relevant metric than overall PPI due to its closer correlation to inflation -- popped 0.4% in May following a similar move in April and is up 2.3% from the same time last year.
Digging deeper, the final demand goods index decreased 0.2%, driven by a 1.0% decrease in the final demand energy index; while the final demand services index increased 0.3% reflecting a 0.5 % increase in the index for final demand less trade, transportation and warehousing.
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