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US producer prices post largest gain in a year
[WASHINGTON] US producer prices recorded their biggest gain in a year in June as the cost of energy products and services increased, pointing to a steady build-up in inflation as the drag from a strong dollar and lower oil prices fades.
The Labour Department said on Thursday its producer price index for final demand rose 0.5 per cent last month, the largest increase since May 2015, after advancing 0.4 per cent in May.
In the 12 months through June, the PPI increased 0.3 per cent, rising for the first time since December 2014, after slipping 0.1 per cent in May.
Economists polled by Reuters had forecast the PPI gaining 0.3 per cent last month and dipping 0.1 per cent from a year ago.
The dollar's surge between June 2014 and December 2015 put downward pressure on producer prices, helping to keep inflation below the Federal Reserve's 2 per cent target. The greenback's rally has faded this year while oil prices have rebounded from multi-year lows.
Last month, energy prices jumped 4.1 per cent after increasing 2.8 per cent in May. Prices for services rose 0.4 per cent after gaining 0.2 per cent in May. Services were boosted by a surge in costs related to securities brokerage and dealing.
Healthcare costs were unchanged as a 0.1 per cent rise in doctor visits was offset by weak home healthcare services.
A key measure of underlying producer price pressures that excludes food, energy and trade services rose 0.3 per cent last month after edging down 0.1 per cent in May. The so-called core PPI was up 0.9 per cent in the 12 months through June. The core PPI increased 0.8 per cent in May.