Core PPI (ex-food and energy) rose 4.7% YoY and 0.2% MoM in June, below
forecasts; headline PPI slowed to a 5.5% YoY gain. Energy prices fell 6.4% in
June and transportation and storage costs declined, easing inflationary
pressure. Freight rates remain elevated due to higher fuel costs and driver
shortages linked to tighter immigration policy under the Trump administration.
Food prices fell for the first time in three months, though food costs are still
up year-to-date amid weather, war and tariffs. The softer PPI, following a
softer-than-expected CPI report, may give the Fed more room to delay rate hikes,
but renewed Middle East hostilities could reverse the respite.
