Wholesale prices rose 0.3% in July, more than expected

Wholesale prices rose more than expected in July, contrary to recent trends, indicating that inflationary pressures are easing.

producer price IndexThe Bureau of Labor Statistics reported on Friday that, which measures the cost producers of goods and services receive for their products as opposed to the cost consumers pay, increased 0.3% for the month. It was the biggest monthly gain since January and exceeded an unchanged reading in June.

The core PPI, excluding food and energy, also rose 0.3%, the biggest monthly increase since November 2022, after a 0.1% decline in June. The core PPI rose 2.4% on a 12-month basis, the lowest since January 2021.

Economists polled by Dow Jones were expecting a 0.2% increase for both readings. Excluding food, energy and business services, the PPI increased by 0.2%.

On a year-over-year basis, the headline PPI rose only 0.8%. Prices excluding food, energy and business services rose 2.7% on an annual basis, unchanged from June.

market went down after the report, Futures linked to the Dow Jones Industrial Average are down about 70 points. Treasury yields rose along with the benchmark 10 year note The session was up nearly 0.06 percentage points at 4.137%.

Services costs pushed the index up, rising 0.5% for the month, the biggest gain since August 2022. Most of this came from a 7.6% increase in prices for portfolio management, which includes fees received for investment advice. In addition, prices for business services rose by 0.7%, as well as transportation and storage by 0.5%.

Commodity prices rose only 0.1%, although food prices rose 0.5%, while prices excluding food and energy were unchanged. In the food category, meat grew by 5%. Energy was a mixed bag: The cost of many gas fuels rose, but diesel declined 7.1%.

The release of the PPI comes a day after the more widely followed BLS report consumer price Index On both the headline and core readings, it was up 0.2% for the month.

However, the 3.2% 12-month rate of change in CPI was slightly lower than economists had expected, strengthening the case for reducing inflation.

Federal Reserve officials are closely watching both measures. While the CPI often gets more attention, the wholesale price measure is viewed as a leading indicator because it looks at pipeline costs for various products and services.

Policymakers are debating how far further interest rates need to be raised, after 11 increases since March 2022 totaling 5.25 percentage points. In recent days, some officials have indicated that rate hikes may end as inflation returns to the Fed’s 2%. long term goals.

Markets have handed the Fed a near-certainty of not raising rates at its September meeting.

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