Producer price index fell 0.3% in June
Rising inflation first shows up in wholesale prices.
Wholesale prices fell in June for the first time in 10 months largely due to lower gas prices, but it's unclear if the recent slowdown in inflation will persist in light of renewed hostilities between the U.S. and Iran.
The producer-price index dropped 0.3% last month , the government said Wednesday, following a similar decline in the prices consumers pay.
The chief source of the decline in inflation in June was a big drop in energy prices after the U.S. and Iran agreed to peace talks last month. Wholesale gas prices sank 12%.
Yet hostilities resumed this week over control of the key strait of Hormuz, pushing oil prices higher.
The good news is, the cost of oil is still far below a recent peak. Energy prices might not have a big effect on inflation like they did in the spring.
The danger from the recent wave of inflation is not over, though. Wholesale prices have risen 5.5% past 12 months and show there's more inflation sloshing about in the guts of the U.S. economy.
Wholesale prices are where inflation shows up first, and these prices tend to hint at future changes in what consumers pay.
Big picture: Consumer and wholesale prices both eased in June because of declining oil prices, but it remains to be seen if inflation slows enough in the months ahead to deter the Federal Reserve from raising interest rates.
With inflation running near a three-year high, new Fed chief Kevin Warsh has promised to stamp it out. Raising interest rates is the central bank's chief tool to do that.
Fed officials might be willing to wait, however, to see if the Mideast conflict dies down and reduce the pressure in energy prices. The recent oil shock has been the biggest driver of the spike in inflation this year.
Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX were set to open higher in Thursday.
-Jeffry Bartash
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(END) Dow Jones Newswires
July 15, 2026 08:35 ET (12:35 GMT)
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