The Producer Price Index (PPI), per Wednesday’s Bureau of Labor Statistics report, slowed in June to 5.5 percent year over year and down from May’s four-year high of 6.2 percent. The decline in producer price inflation came as the Straits of Hormuz reopened in mid-June, allowing energy prices to come down from the Iran war’s highs. 

Core PPI, excluding food and energy as voliatile items, remained unchanged from May at 5.1 percent growth year-over-year. 

Prices for final demand energy declined 6.4 percent in June, following a 28.1 percent increase in energy prices since Iran closed the Straits of Hormuz at the beginning of the Iran war.

The June 17 memorandum of understanding between the United States and Iran allowed the opening of the strait, causing energy prices to fall as ships transited the sea lane. The reclosure of the strait, as the conflict resumed this weekend, begins a new upwards trend for oil prices as traffic slows through the Persian Gulf.