The latest data from the Labor Department reveals that U.S. supplier prices increased by 0.3% in July compared to the previous month. This marks a bounce back from June's unchanged reading. The upturn in prices can be attributed to higher meat prices and larger margins at wholesalers.
The producer-price index, which provides insights into supply conditions across the economy, has experienced more modest monthly changes since the beginning of the year. This comes after a period of rapid increases during the recovery from the pandemic-induced supply constraints.
Excluding volatile food and energy categories, core producer prices also saw a 0.3% rise in July following a 0.1% decrease in June.
In annual terms, supplier prices rose by 0.8% in July compared to the same period last year. The peak for annual PPI was recorded in May 2022 at 11.1%. Core PPI saw a year-on-year increase of 2.4% in July.
On the other hand, the consumer-price index, another important measure of inflation, showed a continued easing of price pressures in July. This is likely to discourage the Federal Reserve from considering an interest rate hike in their upcoming September meeting.
According to the Labor Department, the CPI grew modestly by 0.2% in July compared to the previous month, mirroring June's increase. Core CPI, which excludes food and energy categories, also experienced a 0.2% rise during both months.
This data suggests that while supplier prices have been on an upward trend, consumer prices have remained relatively stable.
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