A measure of wholesale prices rose more than expected in June amid Wall Street's renewed assessment that the Federal Reserve will begin to ease interest rates.
The producer price index (PPI) rose 0.2% last month, the Department of Labor's Bureau of Labor Statistics reported on Friday. Economists polled by Dow Jones expected a 0.1% increase for the index. PPI is now up 2.6% over the past year.
The PPI is a measure of the prices producers get for their goods and services on the open market. In June, the increase in prices for services offset the decrease in goods prices.
The reading was an improvement from May's figure, which was also revised higher. Friday's report noted that the index was unchanged in May compared to a 0.2% decline in the original release.
The warmer-than-expected PPI reading runs counter to recent data showing inflation is easing, although economists and investors tend to put more weight on consumer-focused inflation readings.
Friday's report came shortly after June's consumer price index (CPI) showed cooler-than-expected results on Thursday. The CPI actually shows that headline inflation has declined on a monthly basis and is now at 3% year-on-year.
The central bank's next policy meeting is at the end of July, but it is expected to keep interest rates steady by then. Traders are increasingly focusing on the September meeting as a possible time for the first rate cut.
The Fed's preferred reading of inflation is the price index of personal consumption expenditures (PCE). June PCE data is scheduled to be released on July 26.
