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U.S. producer prices unexpectedly fall; underlying inflation stabilizing - Reuters

U.S. producer prices unexpectedly fall; underlying inflation stabilizing - Reuters

U.S. producer prices unexpectedly fall; underlying inflation stabilizing - Reuters
Jul 10, 2020 45 secs

producer prices unexpectedly fell in June as rising costs for energy goods were offset by weakness in services, pointing to subdued inflation that should allow the Federal Reserve to keep pumping money into the economy to arrest a downward spiral.

The producer price index for final demand dropped 0.2% last month after rebounding 0.4% in May.

Excluding the volatile food, energy and trade services components, producer prices rose 0.3% in June.

The Fed tracks the core personal consumption expenditures (PCE) price index for its 2% inflation target.

The core PCE price index increased 1.0% on a year-on-year basis in May, the smallest advance since December 2010.

June’s core PCE price index data will be released at the end of this month.

Goods prices gained 0.2% last month after jumping 1.6% in May.

The cost of services dropped 0.3% in June after falling 0.2% in the prior month.

Those healthcare and portfolio management costs feed into the core PCE price index.

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