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The prices manufacturers and suppliers charge businesses for their products jumped 11.3 percent in June, year on year, because of rocketing energy costs, the U.S. labor department reported.
June marked the seventh consecutive month of double-digit increases in the U.S. Producer Price Index (PPI) and notched a slight rise from May’s 10.9 percent gain.
On a seasonally adjusted basis, so-called “factory gate” prices added 1.1 percent in June over May.
The core PPI, which excludes energy costs, rose 6.4 percent, year over year, its slightest increase since October 2021, The Wall Street Journal said, attributing the slowing pace to some clearings of clogged supply chains.
Consumer prices rose 9.1 percent in June, according to the labor department.
TREND FORECAST: While there has been some easing of supply chain disruptions which have improved supply conditions, across the manufacturing and industrial sectors price pressures are reportedly still high.
Thus, price increases will be passed on in all sectors, consumer products as well. And in the consumer retail sector, “shrinkflation” where people are paying more for less product, will be the New ABnormal.
As we have forecast, considering inflation in the U.S. is at a 40 year high, the rate increases by the Fed, while bringing the economy down, will not ease inflation. Thus, Dragflation—declining economy, rising inflation—will persist.