NEW YORK (AP) – Producer prices in the United States rose more than expected in June, driven by higher margins at service providers. This increase offset a second consecutive month of declines in the cost of goods.

According to data released on Friday by the Bureau of Labor Statistics, the producer price index for final demand increased by 0.2% from the previous month. On a year-over-year basis, the PPI rose by 2.6%. The rise in prices was slightly higher than what analysts had forecasted.

The increase in producer prices was primarily driven by a boost in margins at service providers. This uptick helped offset the ongoing decline in the prices of goods. Overall, the data suggests that there is still some inflationary pressure in the US economy, even as some sectors continue to face challenges due to the ongoing pandemic.

Despite the rise in producer prices, concerns remain about the overall inflationary pressures in the economy. The Federal Reserve is closely monitoring these developments as they consider their next steps in terms of monetary policy. Additionally, rising prices could impact consumers’ purchasing power, especially if wage growth does not keep pace with inflation.

The latest data on producer prices reflects the complex dynamics at play in the economy. With service providers seeing increases in margins, while the cost of goods continues to decrease, policymakers will need to carefully navigate these diverging trends. The coming months will be crucial in determining how these price movements will impact overall economic growth.