Producer Price Index (PPI) was unchanged in June. This data is part of a monthly report that the Bureau of Labor Statistics released on Wednesday. The seasonally adjusted figures IHS used to calculate the overall index hide a great deal of volatility as some sectors continued to improve while others stalled out. This stability suggests that recent tariffs imposed by the Trump administration have had only a marginal impact on the U.S. economy and inflation levels.
Specifically, the overall PPI for final demand goods prices increased by a slight 0.3% in June. One of the biggest drivers of this increase was the price of communication equipment. They increased by 0.8% on the month. Prices for services decreased by -0.1%, showing a varied trend among service and good categories included in the index.
The report featured updated information that highlighted a huge, positive clerical change. On the positive side, the PPI level for May was increased to a 0.3% gain, from the first pass report of just a paltry 0.1% increase. This methodological change emphasizes a stronger trend in core goods prices, which increased 0.3% in May. On a year-over-year basis, the headline PPI was up 2.3%, a step down from the 2.7% reported for May.
Economists had predicted a 0.2% increase in core PPI for June. The underlying results turned out to be pretty stable, which may have big implications for monetary policy in the next few months. That the PPI managed to stay level indicates that inflationary pressures are still fairly well contained in the face of tariff implementations.
Those results from June’s PPI strongly suggest that tariffs will not be a major source of upward pressure on inflation in the months ahead. Analysts are touting this stability as a sign that policymakers can start to have confidence in the current economic climate. It demonstrates that, regarding pricing structures, the basics still hold strong against external, trade-related shocks.