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Wholesale price increases in the US eased in July, suggesting that inflation pressures are further cooling as the Federal Reserve moves closer to cutting interest rates, likely beginning next month.
The Labor Department reported Tuesday that its producer price index—which tracks inflation before it reaches consumers—rose 0.1% from June to July. That was down from a 0.2% rise a month earlier. And compared with a year earlier, prices were up 2.2% in July. That was the smallest such rise since March and was down from a 2.7% year-over-year increase in June.
The July wholesale figures reflect a broad and steady slowdown in price increases, which peaked at a four-decade high in mid-2022 but are now moving toward the Fed’s 2% inflation target. On Wednesday, the Labor Department will release the most well-known inflation measure, the consumer price index.
Tuesday’s report shows that prices in the nation’s vast service sector fell 0.2% last month, the biggest drop since March 2023. Goods prices rose 0.6%, largely because gasoline prices jumped 2.8% from June to July.
Excluding food and energy prices, which tend to fluctuate sharply from month to month, so-called core wholesale prices were unchanged from June and were up 2.4% from July 2023. The increases were milder than forecasters had expected.
