US Headline Producer Inflation Expected to Ease in June

US producer prices are expected to have remained unchanged in June 2026, marking the weakest monthly reading in ten months, after increasing by 1.1% in each of the previous two months. The moderation was likely driven by lower energy prices following the ceasefire agreement between the US and Iran. Excluding the more volatile food and energy components, core producer prices are forecast to rise by 0.4% in June, matching May's increase. On an annual basis, headline producer inflation is expected to ease to 6.2% from 6.5%, marking its first slowdown in eight months after reaching its highest level since November 2022. By contrast, annual core producer inflation is projected to accelerate to 5.2% from 4.9%, its highest reading since December 2022.

Producer prices for final demand in the US increased 1.1% mom in May 2026, the same as a downwardly revised 1.1% rise in April, and once again above forecasts of 0.7%. Prices of goods soared 2.8%, following a 1.9% jump in April, with over half of advance attributable to a 23.4% increase in gasoline. Prices for diesel fuel, jet fuel, plastic resins and materials, industrial chemicals, and natural gas liquids also rose. In contrast, a 10.1% decline was seen in pork. On the other hand, prices for services rose 0.3%, slowing from a 0.7% gain in April, with over 40% of the increase due to a 4.8% rise in prices for portfolio management. However, margins for machinery and equipment wholesaling fell 1.9% and a drop was also recorded for fuels and lubricants retailing. Year-on-year, the PPI rose 6.5%, the most since November 2022 and above forecasts of 6.4%. Meanwhile, core PPI increased 0.4% on the month, compared to forecasts of 0.5% and 4.9% yoy, also less than expectations of 5.4%.

US producer prices likely increased by 0.7% month-over-month in May 2026, following a 1.4% surge in April which was the largest monthly gain since March 2022. Energy prices are expected to remain a major driver of inflation, particularly gasoline and jet fuel, as the ongoing conflict with Iran continues to disrupt oil supplies and push crude prices sharply higher. Core producer prices, which exclude the more volatile food and energy components, are forecast to rise by 0.5% in May, moderating from the 1% increase recorded in April. On an annual basis however, headline producer inflation is projected to accelerate for a fourth consecutive month to 6.4%, up from 6% in April and marking its highest level since December 2022. Meanwhile, annual core producer inflation is expected to edge up to 5.4% from 5.2%, also reaching its highest reading since December 2022.