June Producer Prices Log Surprise Drop as Energy Costs Decrease

US producer prices unexpectedly dropped on a monthly basis in June amid a steep decline in the cost of energy products, official data showed Wednesday. The producer price index decreased 0.3% on a seasonally adjusted basis last month, compared with May's downwardly revised 0.6% gain, the Bureau of Labor Statistics reported. Wall Street expected no change for June, according to a Bloomberg survey. Wholesale goods prices fell 1.4% last month, the largest drop since July 2022, as prices for energy dropped 6.4%. Gasoline prices slumped 12%, according to government data. US retail gasoline prices averaged $3.89 per gallon Wednesday, compared with $4.065 a month ago, according to data from AAA, a travel organization that tracks fuel prices in the country. Crude prices plunged in May and June, but have rallied this month as tensions between the US and Iran escalated, potentially putting their preliminary peace deal at risk. "We expect to see another weak reading for the July PPI, even though global oil prices have moved higher in the past week," Oxford Economics US Economist Grace Zwemmer said in remarks e-mailed to Wednesday. Core producer prices, which exclude the volatile food.