Germany Wholesale Prices Fall in June but Stay Sharply Elevated
German wholesale prices dipped 0.7% in June, driven by cheaper oil, yet remain nearly 5% above year-ago levels.
Germany's wholesale price index fell 0.7% month-on-month in June, accelerating slightly from May's 0.6% decline, as tumbling petroleum costs dragged the headline reading lower. On an annual basis, the index eased to +4.9% from +5.9% in May — a welcome step down, but still a figure that signals persistent upstream price pressure across Europe's largest economy.
The primary driver of June's monthly drop was a 6.8% plunge in petroleum product prices compared to May, offering some short-term relief to businesses dependent on energy inputs. Non-ferrous ores, metals, and semi-finished metal products also retreated, falling 2.7% from the prior month.
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Yet the monthly relief tells only half the story. Petroleum products remain 21.7% more expensive than they were in June of last year, while non-ferrous metals and related goods are up a striking 31% on a year-over-year basis. Both surges trace back to the energy and commodity price shock that built up in the early stages of the US-Iran conflict, which sent raw material costs sharply higher.
The contrast between the softening monthly trend and the still-elevated annual comparisons illustrates how deeply embedded the inflation impulse remains in the German supply chain. Until year-ago base effects fully normalize, headline wholesale figures are likely to stay uncomfortably high even as month-to-month readings cool. Businesses and policymakers will need to watch both timelines closely before concluding that wholesale disinflation is firmly underway.
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