Industrial producer prices for the home market saw a slight monthly decline of 0.3 percent and a significant annual drop of 6.0 percent in June. This marks the seventh consecutive month of annual decline, though prices remain approximately 20 percent above 2021 levels. This easing is attributed to a reduction in prices for mining, energy, and water products as they fell by 1.0 percent. On the other hand, prices for manufactured goods remained almost stable, declining slightly by 0.1 percent after a decline of 0.3 percent in May.

The persistent decrease in prices for mining, energy, and water products reflects continued falls in electricity production and trade prices. Despite the decline, these prices remain 23 percent above their 2021 levels. Refined petroleum prices eased by minus 0.8 percent after a steep decline of 7.9 in May following oil price stabilization but were still 40 percent above 2021 levels. Food and beverage prices fell slightly 0.3 percent, driven by decreases in dairy products and cheese by minus 0.6 percent, remaining 25 percent above their 2021 levels.

Overall, the data illustrate a complex scenario where annual declines persist, but prices remain significantly higher than pre-pandemic levels, indicating underlying inflationary pressures despite recent reductions.

The producer price indices (PPI) measure transaction prices, exclusive of VAT, for goods from industrial activities sold on the French market. Construction is excluded. Changes in the index provide a guide to inflation from the point of view of the product's producer/manufacturer and, in contrast to the consumer price index (CPI), excludes VAT and other deductible taxed associated with turnover.

The PPI measures prices at the producer level before they are passed along to consumers. Since the producer price index measures prices of consumer goods and capital equipment, a portion of the inflation at the producer level gets passed through to the consumer price index (CPI).

Because the index of producer prices measures price changes at an early stage in the economic process, it can serve as an indicator of future inflation trends. The producer price index and its sub-indexes are often used in business contracts for the adjustment of recurring payments. They also are used to deflate other values of economic statistics like the production index. It should be noted that the PPI excludes construction.

The PPI provides a key measure of inflation alongside the consumer price indexes and GDP deflators. The output price indexes measure change in manufacturer' goods prices produced and often are referred to as factory gate prices. Input prices are not limited to just those materials used in the final product, but also include what is required by the company in its normal day-to-day operations.

The PPI is considered a precursor of both consumer price inflation and profits. If the prices paid to manufacturers increase, businesses are faced with either charging higher prices or they taking a cut in profits. The ability to pass along price increases depends on the strength and competitiveness of the marketplace.

The bond market rallies when the PPI decreases or posts only small increases, but bond prices fall when the PPI posts larger-than-expected gains. The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.