U.S. producer prices stuck in stagnation, service costs dropping.

The US producer price index remained basically flat in June, mainly suppressed by a decline in service costs, indicating that businesses are absorbing at least some of the increased costs from higher import tariffs. According to a report released by the US Bureau of Labor Statistics on Wednesday, the producer price index remained unchanged from the previous month, after being revised up to a 0.3% increase in May. The median expectation from a Bloomberg survey of economists was for a 0.2% increase. Excluding food, energy, and trade, the PPI also remained flat. Compared to the same period last year, the index rose 2.5%, the smallest increase since the end of 2023. The PPI report comes right after the June consumer price data, which showed that higher tariffs are gradually being passed on to various categories including household goods, appliances, and leisure products. Despite overall moderate inflation so far this year, many economists expect inflation to gradually heat up as more businesses try to offset higher trade costs.