U.S. producer prices rose more than expected in June. This brings an indication of higher pressure on the Fed to raise interest rates to lower inflation.
Prices of producer goods increased by 1.1% compared with May, up more than 0.8% expected. Among the factors driving up producer prices are high petrol and energy prices. Excluding the volatile component, the core PPI rose only 0.4%, a slight slowdown from 0.6% in May.
As a result, the annual rate of producer price inflation increased to 11.3%, having fallen for the past two months. Annual core producer prices fell to 8.2% from 8.5%. Producer prices are often seen as a clearer indicator of inflation.
Separate data, the Department of Labor announced that initial jobless claims rose to a five-month high of 244,000 last week, suggesting that layoff rates may be rising and the re-employment process is not as smooth as in previous months.
The US dollar index, which measures the US dollar against six major currencies, traded stronger after the PPI report was released and is currently trading at 109,000.
