US annual PPI inflation exceeds forecasts, markets tread water

Following the release of the US Producer Price Index (PPI) for June, which showed a larger-than-expected increase in prices, S&P 500 and Nasdaq 100 futures dropped to premarket lows.

The PPI, excluding food and energy, increased by 3.0% year over year against a projected 2.5% and by 0.4% month over month against an estimated 0.2%, according to the US Bureau of Labour Statistics (BLS).

Additionally, the statistics revealed that US producer prices rose by 0.2% in June compared to a 0.1% gain that was anticipated.

This shows that since businesses are paying more for products and services, which they may later pass on to customers, inflationary pressures are likely to endure.

Overall US producer prices increased by 2.6% year over year, surpassing the consensus estimate of +2.3%.

Additionally, the BLS reported that there was no change in May's final demand producer prices.

(Sources: investing.com, reuters.com)