PPI Decline Masks Persistent Inflation Pressure Beneath Cheaper Gasoline

The fell 0.3% in June, mostly due to a 12% decline in . This won’t last.

*PPI Final Demand Month-Over-Month Percent Change*

PPI June 2026

Please consider the BLS Producer Price Report for June 2026.

The Producer Price Index for final demand fell 0.3 percent in June, seasonally adjusted.
Final demand prices advanced 0.6 percent in May and 1.1 percent in April.
On an unadjusted basis, the index for final demand increased 5.5 percent for the 12 months ended in June.
The June decline in the index for final demand can be attributed to prices for final demand goods, which fell 1.4 percent.
The index for final demand services moved up 0.2 percent.

PPI Final Demand Month-Over-Month Details

Final Demand: -0.3 percent
Final Demand Goods: -1.4 percent
Final Demand Services: 0.2 percent
Final Demand Food: -0.6 percent
Final Demand Less Food and Energy: 0.2 percent

Final Demand Synopsis

Final Demand Goods: The index for final demand goods moved down 1.4 percent in June, the largest decrease since falling 1.9 percent in July 2022. Leading the decline in June, prices for final demand energy dropped 6.4 percent. The index for final demand foods moved down 0.6 percent. Conversely, prices for final demand goods less foods and energy increased 0.2 percent.
Goods Detail: Nearly two-thirds of the June decline in the index for final demand goods can be traced to prices for gasoline, which dropped 12.0 percent. The indexes for diesel fuel, jet fuel, fresh vegetables (except potatoes), , and thermoplastic resins and materials also fell. In contrast, prices for plastic products advanced 1.6 percent. The indexes for residential electric power and for potatoes also increased.
Final Demand Services: The index for final demand services rose 0.2 percent in June after falling 0.1 percent in May. Over 60 percent of the advance can be attributed to margins for final demand trade services, which moved up 0.4 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand services less trade, transportation, and warehousing increased 0.1 percent. Conversely, the index for final demand transportation and warehousing services declined 0.1 percent.
Services Detail: Half of the June increase in the index for final demand services can be traced to margins for fuels and lubricants retailing, which jumped 13.0 percent. The indexes for securities brokerage, dealing, and investment advice; furniture retailing; apparel, jewelry, footwear, and accessories retailing; loan services (partial); and inpatient care also rose. In contrast, margins for machinery and vehicle wholesaling declined 8.4 percent. The indexes for food and alcohol wholesaling and for deposit services (partial) also fell.

PPI Final Demand Year-Over-Year

PPI Final Demand Notes

Final Demand: 5.5 percent
Final Demand Goods: 7.9 percent
Final Demand Services: 4.6 percent

PPI Final Demand Services

Services Key Points

Services represent a dominant portion of the Producer Price Index (PPI) for final demand, accounting for approximately 68% to over 70% of total PPI coverage as of early 2026.
Services are often the primary driver of PPI inflation, significantly outweighing goods.
The trend in services is now ominous. Year-over-year services PPI is up 4.6 percent.

PPI Synopsis

What’s happening now is neither temporary nor random.

Prices declined following the memorandum of understanding (MOU) with Iran, opening the Strait of Hormuz. The strait is now closed again.

Price pressures will persist as long as the strait is closed.

Looking Back and Ahead

Last month I commented, “This PPI report is probably as bad as it gets for a while. The price of gasoline and crude have been falling.”

Now I warn that If the strait remains closed, this month will be as good as it gets for a while.

Note that we are heading into midterm elections with gasoline and diesel prices rising. Other prices will follow.

But that’s OK because ….

Trump Loves the Inflation

In case you missed it, please note Trump Says “I Love the Inflation”, Literally

In response to a question about the CPI Trump responded “I love the Inflation”

Q&A on Inflation

When asked if he is concerned about the latest inflation numbers that came out this morning [June 10], President Trump responded, “No, I love it. The numbers were great. You know what I really love? I love the inflation.”

Trump keeps giving democrats sound bites for the election. “I love the inflation” is one hell of a sound bite. And it’s in context.

US Guardian Angel of the Strait

On July 13, 2026 I commented Trump Says the US Is the Hormuz Strait Guardian, Will Charge 20 Percent Fee

Instead of paying Iran $1 million per ship, Trump wants 20 percent of cargo.

Trump revised that the next day with an equally ridiculous announcement, Trump Ends 20 Percent Protection Fee Racket, Replaced with Investment Racket