Total PPI decreased 0.3% month-over-month in June (consensus: 0.1%) following a downwardly revised 0.6% increase (from 1.1%) in May. The June drop was driven by a 1.4% decline in prices for final demand goods, which was paced by a 6.4% decline in prices for final demand energy.
Core PPI, which excludes food and energy, was up 0.2% month-over-month (consensus: 0.4%) following a downwardly revised 0.1% increase (from 0.4%) in May. On a year-over-year basis, total PPI was up 5.5% versus 6.0% in May, and core PPI was up 4.7% versus 4.6% in May.
The key takeaway from the report is that it is an encouraging monthly marker of how the inflation data can improve with a decline in energy prices; however, it also reveals on a year-over-year basis that wholesalers are still dealing with high prices. Net-net, this report conveys the need for more improvement in bringing down wholesale prices, but it was better-than-feared when also factoring in the downward revisions to the prior month.
July Empire Manufacturing 15.6 (prior 5.7), with the new orders index up 18.7 points to 22.2 and the prices paid index down 8.7 points to 52.3.