US wholesale inflation picked up in June in sign that some price pressures remain elevated

WASHINGTON (AP) — Wholesale prices in the United States rose by a larger-than-expected 2.6% last month from a year earlier, a sign that some inflation pressures remain high.

The increase, the sharpest year-over-year increase since March 2023, comes at a time when other price indicators are showing that inflation has continued to ease.

The Labor Department said Friday that its producer price index — which tracks inflation before it reaches consumers — rose 0.2% from May to June after being unchanged the month before. Excluding food and energy prices, which tend to bounce around from month to month, so-called core wholesale prices increased 0.4% from May and 3% from June 2023.

The increase in wholesale inflation last month was driven by a sizable 0.6% rise in services prices, led by higher profit margins for machinery and auto wholesalers. But profit margins for wholesalers and retailers — categorized as "trade services'' in the producer price report — can be very volatile. By contrast, a measure of wholesale inflation that excludes trade services, food and energy was unchanged from May to June. It helps explain why many economists were not alarmed by Friday's unexpected uptick in overall wholesale inflation.