Wholesale inflation pricing rose just slightly in June from May levels, the Labor Department reported Thursday. Prices throughout the supply chain continued to recede as consumer and producer inflation reports in June showed continued declines in increases.
The Bureau of Labor Statistics (BLS) said the producer price index (PPI), a measure of the prices that companies get for finished goods in the marketplace, rose 0.1% in June after falling 0.4% in May. The producer report comes a day after the consumer price index rose 3% year over year, its lowest level since March 2021.
Final demand goods prices were flat in June after a 1.6% decrease in May.
From the bottom of the supply chain up, prices fell precipitously in June. Only in Stage 4 intermediate demand, measuring the products purchased by industries primarily producing output sold to final demand, such as RV manufacturers, did year-over-year prices rise. Final demand prices rose 1.4% year over year, continuing declining increases each month in 2023.
Stage 4 goods inputs were flat in June after a 0.6% decrease in May. Stage 4 goods inputs have increased only one month in the past nine.
Goods inputs for Stage 3 intermediate demand, measuring suppliers to Stage 4 producers such as RV manufacturers, fell 0.3% in June after a revised 2.9% decline in May. Goods inputs for Stage 3 demand have declined for 12 consecutive months.
Overall, year-over-year Stage 3 demand fell 7.5%. The decline was the largest year-over-year decline since May 2020.
Goods inputs for Stage 2 intermediate demand, measuring suppliers to Stage 3 suppliers, fell 3.2% in June after a revised 3.7% decline in May after a 1.9% increase in April, the fifth time in six months Stage 2 goods inputs fell. Overall, Stage 2 intermediate demand dropped 13.4% year-over-year, the largest year-over-year decline since April 2015.
Stage 2 demand is the first supply-chain stage to reach pricing levels registered before the pandemic. Soaring inflation in 2021 and 2022 have made comparable normalized pricing levels generally months in the first half of 2020.
Finally, goods inputs for Stage 1 demand fell 0.8% in June after a 1.8% decline in May, the eighth month in the past nine of declines. Overall, demand declined 4.7% year-over-year, the largest 12-month decline since June 2020.
