Small businesses continue to face higher supplier prices, as indicated by the latest Producer Price Index (PPI) data. In June, the PPI rose 0.2 percent, surpassing expectations and pointing to persistent cost increases for businesses that may eventually impact consumers. The increase was primarily driven by a rise in prices for final demand services, while goods inflation fell. Year-over-year, the PPI climbed higher than expected to 2.6 percent, up from the previous month. Core PPI, excluding volatile components, also saw a 0.4 percent increase, indicating ongoing inflationary pressures.
The PPI surge aligns with small business owners’ experiences, with nearly 72 percent reporting higher supplier prices in June. Despite this, the percentage was the lowest in seven months. Purchasing Managers’ Index (PMI) reports also reflected similar trends, showing a continued rise in input costs.
Financial markets showed little reaction to the PPI numbers, with the Nasdaq Composite Index experiencing a downturn following its record high. Treasury yields were mixed, while the U.S. Dollar Index fell below 104.2. Traders are anticipating a rate cut by the Federal Reserve in September, based on the CME FedWatch Tool.
Overall, the data suggests that businesses are facing ongoing challenges with rising costs, potentially leading to increased prices for consumers in the future. Please rewrite this sentence.
Source link
