Economic Watch: Wholesale Prices, Industrial Production Rise
Wholesale prices advanced 0.4% in June, according to the U.S. Labor Department, more than many analysts were expecting.


Wholesale prices advanced 0.4% in June, according to the U.S. Labor Department, more than many analysts were expecting.
The increase from the month before follows a 0.5% hike in May and the second straight gain for the Producer Price Index.
The June increase was also double a consensus estimate from a poll of economists surveyed by Reuters.
Core prices, which exclude food and energy, increased 0.3% in June, the biggest hike since October.
Prices for goods increased 0.7% in June, with more than half of this due to higher prices for energy, while service prices moved up 0.3%.
Despite the upturn, the PPI through for the past 12 months through June is down 0.7% following a 1.1% decline through May.
“From the Federal Reserve's perspective, stronger prices will help bolster the argument for a near-term [interest] rate increase, however, there is still a long way to go before we can talk about inflationary concerns,” said Lindsey Piegza, chief economist at Stifel Fixed Income.
The Federal Reserve has been looking to push short-term interest rates higher, which have been near zero since late 2008, but in the past has indicated the overall U.S. economy needs to show signs of steady growth, including having inflation of 2% annually. This has yet to happen, while there was negative overall economic growth in the first quarter of the year.
Meantime, a separate report from the Federal Reserve showed the total output from the nation’s factories, mines and utilizes rose in June from May.
Industrial production increased 0.3% in June but declined at an annual rate of 1.4% for the second quarter of 2015.
In June, manufacturing output was unchanged: The output of motor vehicles and parts fell 3.7%, but production elsewhere in manufacturing rose 0.3%.
The indexes for mining and utilities advanced 1% and 1.5%, respectively.
At 105.7% of its 2007 average, total industrial production in June was 1.5% above its year-earlier level.
Capacity utilization for the industrial sector increased 0.2 of a percentage point in June to 78.4%, a rate that is 1.7 percentage points below its 1972–2014 average.
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