Gain 11.3% on surge in energy costs

Inflation hit hard at the wholesale level in June, as producer prices surged a near-record amount from a year ago due to a big jump in energy costs, the Bureau of Labor Statistics reported Thursday.

The producer price index, a measure of the prices received for final demand products, increased 11.3% from a year ago, the highest reading since the record 11.6% in March.

Of that gain, almost 90% came from a 10% increase in final demand energy costs as prices for oil, natural gas and other products soared during the month.

Excluding energy, as well as food and trade service prices, so-called core PPI rose 6.4% on a 12-month basis, a deceleration from the 6.8% gain in May.

On a monthly basis, the core measure increased just 0.3%, below the 0.5% Dow Jones estimate. Headline PPI rose 1.1% on the month, higher than the 0.8% estimate.

The release comes one day after the BLS reported that the consumer price index, which measures final-sale prices in the marketplace, surged 9.1%, the highest 12-month gain since November 1981.

In a separate Labor Department report, weekly jobless claims rose to 244,000 for the week ended July 9, the highest number since Nov. 20, 2021. Continuing claims, which run a week behind the headline number, fell to 1.33 million, a decline of 41,000.

While there are signs the jobs market is weakening, the focus has been on inflation.

Energy and food prices have been particularly burdensome, but the June reports show price pressures are broadening.

There were a few optimistic signs in the PPI report — prices for chicken eggs, for instance, tumbled 30.2%, while iron and steel scrap prices were off 10.4%.

However, Federal Reserve officials are expected to keep pressing forward on interest rate hikes to bring inflation down closer to their longer-run 2% goal.

Following the CPI release, traders were pricing in an 86% chance the central bank, at its meeting later this month, will raise benchmark interest rates by a full percentage point. That would be the largest such increase since the early 1980s.