US producer prices post another solid rise in June

Producer prices rose faster than expected in June. Headline PPI was up 0.4% m/m, above consensus (0.2%) forecasts. The rise in headline PPI was driven by goods prices, but services PPI was also solid. Core PPI (ex-food and energy) rose 0.3% m/m (consensus: 0.1%). On a y/y basis, headline PPI fell 0.7% as declines in energy prices in previous months continue to drag the y/y rate, while core PPI inflation rose 0.8% y/y (from 0.6%). 

The goods component of PPI increased 0.7% m/m, boosted by rising energy (2.4%) and food (0.6%) prices. Services inflation was up 0.3% on the month. Headline personal consumption PPI rose 0.5% m/m (-0.1% y/y) and the core measure posted a 0.3% monthly gain (1.5% y/y). June marks the second month running during which PPI suggests a solid and broad-based firming in pipeline price pressures. 

"We expect PPI inflation to continue to rise, as the significant drag from the energy component is likely behind us. In addition, we expect the impact of the dollar appreciation on domestic inflation to largely dissipate by the second half of this year," says Barclays.