Inflation in prices received by producers (prior to sales to consumers) increased 0.5% in June according to the latest Producer Price Index release by the Bureau of Labor Statistics.  The increase was driven by a 0.4% increase in the price of services, while the final demand index for goods rose 0.8% (the price of services is weighted roughly double the price of goods in the index). Roughly 75% of the increased prices for goods was attributable to a 4.1% climb in energy prices.  Final demand prices for core goods (i.e. goods excluding food and energy) was unchanged.

Unlike last month, increases in final demand prices of services were broad based. The index for services related to securities brokerage and dealing led the charge, posting a robust 7.7% monthly gain, while the indices for automotive fuels and lubricants retailing; machinery, equipment, parts, and supplies wholesaling; traveler accommodation services; airline passenger services; and health, beauty, and optical goods retailing also increased.

Softwood lumber prices were unchanged in June, following a 2.2 percent climb in May. The U.S. dollar remains strong compared to the last decade as a whole. A stronger U.S. dollar makes Canadian softwood lumber cheaper to import, alleviating building cost burdens to some extent.

Gypsum price continued to slide in June, declining 1.8% after dropping 1.1% in the prior month. The price of ready mix concrete rebounded from a 0.5% decrease in May, increasing 0.2%. OSB prices rose by 2.7% in June–the fourth consecutive monthly increase–and have risen 20% since February 2016.

Tags: BLS, Building Materials, building materials prices, construction costs, construction materials cost, economy, inflation, ppi, producer prices