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The
Labor Department said on Friday its producer price index for
final demand increased 0.2 percent last month after increasing
0.4 percent in June.
An increase of 0.4 percent in services prices, which offset a
fall of 0.1 percent in the cost of goods, accounted for the
increase in the PPI last month.
In the 12 months through July, the PPI fell 0.8 percent after
declining 0.7 percent in June. It was the sixth straight
12-month decrease in the index.
Economists polled by Reuters had forecast the PPI edging up 0.1
percent last month and falling 0.9 percent from a year ago.
A strong dollar and weaker oil prices are keeping a lid on
inflation, which has some economists believing that the Federal
Reserve will be hesitant to raise interest rates next month.
Inflation has been persistently running below the Fed's 2
percent target. Last month, wholesale gasoline prices rose 1.5
percent after gaining 4.3 percent in June.
Food prices dipped 0.1 percent in July as egg prices tumbled
after surging in recent months. Food prices increased 0.6
percent in June. Wholesale chicken egg prices fell 24.2 percent
in July after soaring a record 84.5 percent in June.
The volatile trade services component, which mostly reflects
profit margins at retailers and wholesalers, rose 0.4 percent in
July after increasing 0.2 percent in the prior month.
A key measure of underlying producer price pressures that
excludes food, energy and trade services rose 0.2 percent last
month after increasing 0.3 percent in June. The so-called core
PPI was up 0.9 percent in the 12 months through July.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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