- POSTED: 15 Aug 2014 21:54
- UPDATED: 15 Aug 2014 21:58
US producer prices edged higher in July, with gains slowing sharply from the prior month, official data released on Friday (Aug 15) showed.
WASHINGTON: US producer prices edged higher in July, with gains slowing sharply from the prior month, official data released on Friday (Aug 15) showed. The Labor Department said its producer price index rose 0.1 per cent in July, after a 0.4 per cent increase in June.
Rises in services prices, primarily in transportation and warehousing, accounted for the PPI increase, while goods prices were unchanged, the department said. Analysts on average had forecast a 0.2 per cent increase.
Excluding food and energy prices, the PPI rose 0.2 per cent in July, matching estimates. Food prices rose 0.4 per cent while energy prices declined 0.6 percent, including a hefty 2.1 per cent fall in gasoline prices. The year-over-year increase in producer prices fell for a third straight month, to 1.7 per cent.
The report showed tepid inflationary pressures as the US economy continues to grow at a modest pace. "Pipeline pressures from core materials prices remain very muted, so the only threat here comes from companies seeking to offset feared/actual higher labour costs by lifting prices," said Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a client note.
The Federal Reserve, with a dual mandate of price stability and maximum employment, has said inflation remains below its 2.0 per cent target over the long run. The Fed's preferred inflation measure, the personal consumption expenditures price index, slowed to an annualised 1.6 per cent rate in June from 1.8 per cent in May.