EconomyJul 15, 2026
Annual Wholesale Inflation Slows to 5.5% in June
Price Trends
Rhea Lobo
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The producer price index fell 0.3% in June, beating the consensus forecast for no change, as a 12% plunge in gasoline prices drove the biggest monthly drop in wholesale costs since April 2025.
On an annual basis, wholesale prices rose 5.5%, down from a revised 6% in May. Gasoline accounted for roughly two-thirds of the overall monthly decline.
Goods prices fell 1.4%, the largest drop in four years, while energy overall slid 6.4%. Food prices dipped 0.6%.
The report landed a day after the Bureau of Labor Statistics said consumer prices fell 0.4% in June, bringing the annual CPI rate down to 3.5% from 4.2% in May. That was the biggest monthly drop in consumer prices since April 2020.
Both reports beat expectations, but analysts are warning the improvement could be fleeting.
Oil prices have already rebounded as US-Iran tensions escalated again after President Trump announced a new blockade in the Strait of Hormuz, through which a fifth of the world's oil and gas passes.
Gasoline at the pump now sits at $3.89 a gallon, up from $3.15 a year ago. Gasoline is still up nearly 43% compared to June 2025, even after last month's dip.
Semiconductor chip prices are adding another pressure point. Surging demand for AI computing power pushed the computers and computing equipment index up 2.5% in a single month. Apple recently announced 10% to 15% price hikes on some products, citing memory chip shortages.
Fed Chair Kevin Warsh, testifying before the House Financial Services Committee on Tuesday, pushed back on any celebratory reading of the data.
"It's one data point. There might be some that look at this morning's data and say, mission accomplished. That is not my view."
Kevin Warsh, Federal Reserve
Markets still price in at least one rate hike this year, with September seen as a roughly 50-50 chance. The PPI and CPI both feed into the Fed's preferred gauge (the personal consumption expenditures index) that's due later this month from the Commerce Department.
For May, the PCE showed headline inflation at 4.1% and core at 3.4%, both expected to ease following June's cooler readings. With oil prices climbing again, the path back to the Fed's 2% target remains anything but smooth.
