US producer prices hold steady in July
Wholesale prices in the US held steady in July, with increases for fuel, power and a handful of commodities offset by decreases in prices for services such as hotel accommodation, loan services and truck transportation.
The headline producer price index — a measure of industrial inflation — rose 0.2 per cent month-on-month in July, for a year-on-year rate of 1.7 per cent, the Bureau of Labor Statistics reported on Friday. That matched the 1.7 per cent reported for June and was exactly in line with the median forecast among Wall Street economists.
The June and July numbers are the lowest since January 2017, potentially bolstering the Federal Reserve’s case for additional interest rate cuts this year. The most recent consumer inflation data showed headline consumer price index rising at a 1.6 per cent pace in June and core inflation holding just above the central bank’s target of 2 per cent.
The index for final demand goods — finished products as opposed to components — rose during the month, which the BLS said was primarily due to a 5.2 per cent rise in the price of petrol. Indices for products including diesel fuel, electric power, corn, beef and tobacco products rose, offsetting declines for pork and carbon steel scrap.
Countering the rise for goods was the decline in the final services index, the first in six months. The decline in prices were most notable among the indices for fuels and lubricants retailing, loan services, machinery and equipment parts and supplies wholesaling, and truck transportation of freight, the BLS said.
Stripping out volatile food and energy prices, producer prices rose 2.1 per cent year-on-year in July, down from 2.3 per cent in the previous month and expectations it would accelerate to 2.4 per cent.