Producer price index stays flat in July, driven by falling fuel prices
by Joe Fisher · UPIAug. 13 (UPI) -- The producer price index for the month of July remained flat after falling 0.1% in June, the U.S. Bureau of Labor Statistics reports Thursday.
The producer price index, a measure of wholesale inflation, was unchanged for the month but for the 12 months ending in July it was up 4.7%. Final demand prices excluding food, energy and trade services increased by 0.4%.
A decrease in gasoline prices was a significant contributor to holding inflation for final demand goods in check last month. Prices fell about 5.7% after sharp increases throughout the early part of the year, due largely to the Iran war and closure of the Strait of Hormuz, a critical chokepoint in the Middle East oil trade.
The Dow Jones consensus estimate projected a 0.2% increase in the producer price index in July. Core inflation rose 0.2%, excluding food and energy, lower than the Dow consensus projection of 0.3%.
Inflation for final demand services cooled in July, up 0.2% after a 0.5% bump in June. Transportation fell by 1.8% and warehousing service went down 0.1%.
Of the final demand services that recorded rising indexes, portfolio management had the largest acceleration of inflation, rising 6.5%.
In the category of intermediate demand, the index for processed goods decreased by 0.6% and unprocessed goods fell by 1.8%.
Prices for diesel fuel led the charge in decreasing intermediate demand. The Bureau of Labor Statistics attributes more than half of the overall falling intermediate demand to a 6.7% decline in diesel fuel prices.
Unprocessed energy materials led the way in the falling index for unprocessed goods for intermediate demand, down 7.4%.
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