WASHINGTON (Reuters) – U.S. producer prices rose marginally in July as a decline in the cost of energy goods offset higher food prices, pointing to a moderation of inflation pressures at the factory gate.
The Labor Department said on Friday its producer price index for final demand edged up 0.1 percent after a 0.4 percent rise in June. The increase was in line with economists’ expectations.
Producer inflation data has been volatile since the government revamped the PPI series at the start of the year to include services and construction.
Swings in prices received for trade services, a gauge of margins for retailers and wholesalers, have made it hard to see a clear trend in producer prices.
Overall, inflation has been rising in recent months, a fact acknowledged by the Federal Reserve at its July policy meeting. The U.S. central bank, which had repeatedly warned that price pressures were too low, said the likelihood of inflation running persistently below its 2 percent target had diminished somewhat.
In the 12 months through July, producer prices increased 1.7 percent after rising by 1.9 percent in the year to June.
Last month, prices at the factory gate were held back by declining energy prices. Gasoline prices fell 2.1 percent last month after rising 6.4 percent in June. Food prices increased 0.4 percent in July.
Prices received for services at the final demand level nudged up 0.1 percent after rising 0.3 percent in the prior month.
Producer prices excluding food and energy gained 0.2 percent in July after gaining 0.2 percent in June. In the 12 months through June, the core PPI for final demand rose 1.6 percent. It had increased 1.8 percent in June.
Producer prices excluding food, energy and trade services increased 0.2 percent after June’s 0.2 percent gain.
The government also introduced three new indexes to the series focusing on personal consumption.
Personal consumption less food and energy rose 0.2 percent in July after a 0.3 percent gain in June. Excluding food, energy and trade services, the index increased 0.2 percent after a similar rise in June.
(Reporting by Lucia Mutikani; Editing by Paul Simao)