US Producer Prices Unexpectedly Dip 0.1% In July

Paterniano Del Favero
Agosto 10, 2017

But the Bureau of Labor Statistics (BLS) report released Thursday raises new concerns over disinflation.

The producer-price index for final demand, which measures changes in the prices that US companies receive for their goods and services, decreased a seasonally adjusted 0.1% in July from a month earlier, the Labor Department said Thursday.

The index for core prices, which excludes the often-volatile prices for food and energy, dropped 0.1% Economists had expected this measure to increase 0.2%.

Economists surveyed by MarketWatch were expecting a small gain of 0.1% in the producer price index.

The report said food prices came in unchanged in July after climbing by 0.6% in June, while energy prices fell by 0.3% after sliding by 0.5% in the previous month.

Prices for final demand transportation and warehousing services also slid by 0.8%, while the index for final demand services less trade, transportation, and warehousing rose by 0.2%. The price of goods dropped 0.1% last month.

Almost 80% of the decline this month was fueled by a 0.2% decrease in the cost of services.

The annual rate of growth in core producer prices also decelerated to 1.8% in July from 1.9% in the previous month.

Weak inflation has been the trend for years, but disinflation is the reduction in the rate of inflation.

"Normally it's the other way around, wholesale price weakness leads consumer price weakness", Low said.

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