The Producer Price Index (PPI), which measures the average change in the prices set by producers, fell 0.5% in July, spurred by a 9% drop in energy prices, the Bureau of Labor Statistics reported Thursday.
The PPI was up 9.8% year-over-year in July, falling significantly from the near-record 11.3% reached in June, according to BLS data. While prices for final demand goods fell 1.8%, this drop can be attributed almost entirely to the decline in energy prices, with prices for food and all other products increasing by 1% and 0.2% in July respectively.
Thursday’s PPI report found similar trends to the Consumer Price Index data released Wednesday, with prices for food and other goods rising while energy prices fell, according to the BLS.
US PPI fell -0.5% MoM to 9.8% YoY in Jul, down from 11.3% YoY in Jun.
— MTS Insights (@MTSInsights) August 11, 2022
“Today’s PPI report, coming on top of yesterday’s CPI report, is just the latest evidence that ‘Bidenflation’ isn’t going away,” said Alfredo Ortiz, President and CEO of the Jobs Creation Network, to the Daily Caller News Foundation. “The Democrats have created a political burden for themselves, but the financial burden is being paid for by the American people and the small business community, in particular.”
Gas prices have fallen consistently since surging past $5 in June, with the national average for a gallon of gas falling below to $3.99 today, according to the American Automobile Association (AAA). While this is the first time the national average has fallen below $4 in over three months, 25 states still have average gas prices above $4 as of Thursday, with 8 above $4.50 and California and Hawaii still at almost $5.40, the AAA reported Thursday.
Gas prices remain high even in states where gas is relatively cheap, with Texas’ average price of $3.493 still 9.5% higher than last year’s national average of $3.185, and 22.6% more expensive than last year’s average for Texas of $2.846, according to AAA data.
The price of unprocessed goods sold to businesses, such as grains, iron, and steel scrap, fell 12.4% on the back of a 27% drop in the cost of natural energy, according to the BLS. The price of unprocessed foodstuffs and feed for animals fell 6.9% and 0.8% respectively.
Despite these decreases, the price for unprocessed goods sold to businesses was still 27.5% higher than it was last year, the BLS reported. Some unprocessed goods sold to businesses were exceptions to the general trend of price decreases in July, with the price of slaughter hogs going up by 23.2%.
“House Democrats are scheduled to pass a $760 billion spending bill tomorrow that will make inflation even worse,” said Ortiz. “The American people are paying close attention and will know that at this watershed moment for the economy – the start of a recession and the highest inflation in four decades – President Biden and the Democrats chose to double down on their mistakes.”
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