![Wholesale prices rose 0.3% in July, higher than expected](https://image.cnbcfm.com/api/v1/image/107285169-16917580921691758088-30716275238-1080pnbcnews.jpg?v=1691758696&w=750&h=422&vtcrop=y)
A measure of wholesale prices rose more than expected in July, countering recent trends showing easing inflationary pressures.
The producer price index, which measures the costs that producers of goods and services receive for their products, as opposed to the costs that consumers pay, rose 0.3% this month, the Bureau of Labor Statistics reported Friday. That was the biggest monthly gain since January and up from an unchanged reading in June.
Excluding food and energy, core PPI also rose 0.3%, the biggest monthly increase since November 2022, after falling 0.1% in June. Core PPI rose 2.4% on a 12-month basis, the lowest level since January 2021.
Economists consulted by Dow Jones had expected an increase of 0.2% for both measurements. Excluding food, energy and trading services, the PPI increased by 0.2%.
On an annual basis, the total PPI increased by only 0.8%. Prices excluding food, energy and trade services rose 2.7% year on year, unchanged from June.
Markets fell after the report, with futures tied to the Dow Jones Industrial Average falling about 70 points. Government bond yields rose, as did the benchmark 10 year note last at 4.137%, about 0.06 percentage points higher than during the session.
Services fees pushed the index higher, rising 0.5% this month, the biggest gain since August 2022. Much of that was due to a 7.6% increase in portfolio management prices, including fees received for investment advice . In addition, there was a 0.7% increase in trading services prices, along with a 0.5% increase in transportation and storage.
Goods prices rose just 0.1%, while food prices rose 0.5%, while prices excluding food and energy remained unchanged. Within the food category, meat increased by 5%. Energy was a mixed bag: costs for many gas fuels rose, but diesel fell 7.1%.
The PPI release comes a day after the BLS reported that the more widely followed consumer price index also rose 0.2% this month, both on headlines and on fundamentals.
However, the 3.2% annual rate of change in the CPI was slightly less than economists expected, strengthening the case for easing inflation.
Federal Reserve officials are closely monitoring both measures. While the CPI often gets more attention, the wholesale price measure is seen more as a leading indicator because it looks at pipeline costs for different products and services.
Policymakers have debated how much further to raise rates, following 11 hikes totaling 5.25 percentage points since March 2022. In recent days, some officials have indicated that the rate hikes could end as inflation drifts back toward the Fed’s 2%. long term goal.
Markets have all but assured that the Fed will skip a rate hike at its September meeting.