In July, producer price growth in the U.S. on an annual basis eased more than expected, in the latest indication of easing inflationary pressures in the biggest economy in the world.
According to Labor Department data, last month the producer price index for final demand rose 2.2% y/y, a decline from June’s revised 2.7%. Economists had expected a drop to 2.3%.
Data released on Tuesday showed the PPI in July rose 0.1% on a monthly basis, versus the 0.2% gain expected by economists. It rose to 2.2% annually, versus estimates of a 2.3% rise.
Excluding volatile energy and food components, core PPI was flat for the month, versus an expected rise of 0.2%. The narrower PPI measure stood at 2.4% annually, versus the estimate of a 2.7% rise.
This report was released a day before the consumer price index, which will likely show inflation in July remained at 3.0% on an annual basis, the same as June’s number.
At the end of July, the Federal Reserve kept its policy rate in the range of between 5.25% and 5.50% it has been for over a year but indicated that a rate cut may be made as soon as Sept. if inflation continues to ease.
