US producer prices jump past forecasts in June
Wholesale inflation in the US outpaced economists' forecasts in June, driven higher by dearer energy and services and hitting a six-year high.
Final demand prices in the US advanced at a 0.3% month-on-month clip last month, according to the Bureau of Labor Statistics.
Energy costs continued to push higher, rising by 0.8% versus May, alongside a 0.4% increase in services' prices, which combined pushed the year-on-year rate of gain in total final demand prices from 3.1% to 3.4% - their highest level since 2011.
Food prices on the other hand declined by 1.1%.
Economists had forecast increases in total final demand prices of just 0.2% on the month and 3.1% on the year.
Michael Pearce at Capital Economics told clients the "big gain" in services prices was the result of the tighter jobs market pushing costs higher.
There were signs in the goods price data that the recent steel and aluminium tariffs were driving up firms' input costs too.
A 0.3% increase in final demand services less trade, transport and warehousing was also consistent on past form with PCE services inflation continuing to trend higher over the coming months, he said.
"It is likely to only be a matter of time before that shows up in higher consumer prices too."
For his part, Ian Shepherdson at Pantheon Macroeconomics said: "Overall core PPI inflation now stands at 2.8%, the highest rate since September 2011, but it likely will breach 3% in the next couple of months, with the peak likely to be about 3-1/2% at the end of the year.
"This won't all flow into the CPI and PCE, which are moderated by the inclusion of housing costs, but it does not look good."
Following the release of Wednesday's data, the yield on the benchmark 10-year US Treasury note was trading flat at 2.85%, versus at just 2.82% prior to the release of the figures, with that on the two-year bill at 2.59%.