US wholesale prices fall 0.3% in June on lower energy costs

US producer prices dropped 0.3% from May to June, the largest monthly decline since April 2025, driven by a 12% plunge in gasoline prices Source: AP News. The Producer Price Index (PPI) rose 5.5% from a year earlier, down from 6% in May Source: CNN. Core PPI, excluding food and energy, rose 0.2% from May and 4.7% year-over-year Source: AP News.

Key drivers and implications

Energy prices fell sharply, but the relief may be temporary. The decline in gasoline accounted for two-thirds of the overall drop in goods prices Source: CNN. However, intensifying hostilities with Iran and a new blockade in the Strait of Hormuz threaten to push oil prices higher Source: AP News. David Russell of TradeStation noted, "Energy saved the day in June, but that might become ancient history if the Strait of Hormuz doesn’t open soon" Source: CNN.

Fed reaction and outlook

Federal Reserve Chair Kevin Warsh, who took office in May, told Congress that the central bank has "no tolerance for persistently elevated inflation" and cautioned against reading too much into one favorable report Source: CNN. The cooler inflation data reduces immediate pressure for rate hikes Source: AP News. Meanwhile, rising semiconductor chip prices due to AI demand are pushing up costs for computers and electronics, with Apple announcing 10-15% price hikes .