Posted by Joseph Y. Calhoun, III

The Producer Price Index (PPI) rose 1.8% in June:

The Producer Price Index for Finished Goods rose 1.8 percent in June, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today.  This advance followed increases of 0.2 percent in May and 0.3 percent in April.  At the earlier stages
of processing, prices received by producers of intermediate goods climbed 1.9 percent in June after moving up 0.3 percent in the preceding month, and the crude goods index increased 4.6 percent following a 3.6-percent rise in May.  (See table A.)

The June acceleration in finished goods prices was broad based.  The index for energy
goods jumped 6.6 percent after advancing 2.9 percent in the prior month, prices for consumer foods increased 1.1 percent following a 1.6-percent drop in May, and the index for goods other than foods and energy rose 0.5 percent in June after edging down 0.1 percent in the previous month. 

Prices are down 4.6% year over year, but it appears that inflation at the producer level is accelerating. A lot of that has to do with rising oil prices, but even ex food and energy, prices rose 0.5%. Where’s that deflation everyone is so worried about?