Services Pushed July Wholesale Inflation Above Expectations

After slowing to a near halt in June, U.S. producer prices increased at a faster pace in July, according to the Labor Department’s monthly Producer Price Index shared on Aug. 11.

Data showed that the July seasonally adjusted PPI for final demand increased 0.3% month-over-month, following a flat June and 0.3% decline in May.

Economists surveyed by the Wall Street Journal expected a 0.2% PPI increase.

The July PPI was largely driven by a 0.5% rise in the index for final demand services — its largest one-month increase since August 2022 — while prices for final demand goods edged up 0.1%.

On a year-over-year unadjusted basis, July’s overall PPI increased 0.8%.

Core PPI — which omits volatile foods, energy and trade service categories — increased 0.2% in July compared to June. That’s the largest one-month increase since a 0.3% increase this past February. 

July’s core CPI increased 2.7% year-over-year, matching June.

The Department noted that July indexes for machinery and vehicle wholesaling; outpatient care (partial); chemicals and allied products wholesaling; securities brokerage, dealing, investment advice, and related services; and transportation of passengers (partial) all moved higher.

One day earlier, the Labor Department reported that July’s Consumer Price Index increased 0.2% month-over-month (same as June) and 3.2% year-over-year (3.0% in June). Core CPI increased 0.2% month-over-month (same as June) and increased 4.7% year-over-year (4.8% in June).