Producer Prices Increase More Than Expected

July 18, 2006
The glaring, and surprising, fact is that U.S. Labor Department's producer price index (PPI) for finished goods jumped half a percentage point in June, more than their two-tenths percent increase in June and significantly more than the three-tenths ...

The glaring, and surprising, fact is that U.S. Labor Department's producer price index (PPI) for finished goods jumped half a percentage point in June, more than their two-tenths percent increase in June and significantly more than the three-tenths percent increase many economists expected.

However, the so-called core PPI, which excludes price changes for food and fuel, rose two-tenths of a percentage point in June, exactly what economists expected and a tenth of a percent lower than May's increase.

Food posted a major price increase in June, rising 1.4% following a half-percent decline in May. Energy prices rose seven-tenths of a percentage point, nearly twice their May increase, but nowhere near April's 4% gain. These energy prices, of course, do not reflect that dramatic increase in oil prices during the past week as a result of escalating fighting in the Middle East.

At least for several months, energy prices will again be the focus for manufacturers, as they have to pay more for the petroleum that is both fuel and feedstock. But in June, there seems to have been less reason to worry. The cost of goods, including petroleum, at the first stage of production, the "crude" level, actually fell 1.7% after rising 2% in May. And the intermediate level, between crude goods and finished goods, prices rose seven-tenths of a percent in June, down significantly from their 1.1% increase in May.

Popular Sponsored Recommendations

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

3 Best Practices to Create a Product-Centric Competitive Advantage with PRO.FILE PLM

Jan. 25, 2024
Gain insight on best practices and strategies you need to accelerate engineering change management and reduce time to market. Register now for your opportunity to accelerate your...

Transformative Capabilities for XaaS Models in Manufacturing

Feb. 14, 2024
The manufacturing sector is undergoing a pivotal shift toward "servitization," or enhancing product offerings with services and embracing a subscription model. This transition...

Shifting Your Business from Products to Service-Based Business Models: Generating Predictable Revenues

Oct. 27, 2023
Executive summary on a recent IndustryWeek-hosted webinar sponsored by SAP

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!