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The numbers: The cost of wholesale goods and services jumped 1.1% in June largely due to higher energy prices, but the latest report also indicates inflation has spread deeply in the economy and won’t be easy to eradicate.
Economists polled by The Wall Street Journal had forecast a 0.8% gain.
The increase in wholesale prices over the past 12 months rose to 11.3% from 10.9%, the government said Thursday. Just a year and a half ago, prices were rising at a less than 2% pace.
A day earlier, the government also reported that the prices consumers pay directly had risen 9.1% in the past 12 months — the biggest increase in almost 41 years.
If food, gas and retail trade margins are omitted, so-called core producer prices rose just 0.3% in June in a glimmer of hope that inflation pressures are starting to ease.
Yet inflation in the earlier stages of production suggest the upward pressure on prices is still intense.
Big picture: Wholesale and consumer prices are likely ease in July if the recent decline in oil sticks, but make no mistake: High inflation is here to stay for a while.
The Federal Reserve is trying to squelch inflation by sharply raising interest rates and slowing the economy, but the central bank runs the risk of causing a recession if it’s too aggressive.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
were set to open sharply lower in Thursday trades.
