The numbers: The producer price index rose a modest 0.1% in June, indicating that inflation remains under wraps. Economists polled by MarketWatch had predicted a 0.1% fall.
The increase in wholesale inflation over the past year inched down to 1.7% in June, the lowest level in more than two years, the government said Friday.
Excluding food, energy and trade margins, the so-called core PPI rate was flat last month after two straight months of 0.4% gains. The yearly rate of increase in core prices decreased to 2.1% from 2.3%.
What happened: Within the main subcomponents, energy prices dropped 3.1% in June. Wholesale food costs rose 0.6%.
Goods prices fell 0.4% in June. More than 60% of the drop can be traded to a 5% decline in gasoline prices, the government said. Corn prices jumped 19.9%. That’s the biggest gain in almost 4 years.
The index for final demand of services rose 0.4%, the largest increase since last October. Trade services jumped 1.3% after two straight declines.
Big picture: Low inflation is giving the Federal Reserve room to cut interest rates. Fed Chairman Jerome Powell told Congress this week that many officials were ready to ease policy given the uncertainty that was weighing on the economy.
Market reaction: Stocks were set to open higher on Friday. The Dow Jones Industrial
finished above 27,000 on Thursday.