A key measure of inflation in the U.S. economy came in much better than for July.
The producer price index was unchanged in July compared with June, the Bureau of Labor Statistics said Thursday. The index fell 0.3 percent in the prior month, indicating falling prices.
Economists had forecast the broad index of prices received by U.S. businesses to rise by 0.2 percent.
Compared with a year ago, producer prices are up 4.7 percent. Economists had forecast a 12-month increase of 4.9 percent after June’s 5.5 percent reading.
Energy prices fell 3.1 percent from the prior month, the second consecutive month of falling energy prices. Food prices fell by 0.9 percent, the largest decline in over a year.
Excluding food and gasoline, the producer price index rose 0.2 percent in July and 4.2 percent from a year ago. The consensus forecast was for a 0.3 percent increase.
Goods prices fell 0.7 percent, driven by falling fuel prices. Compared with a year ago, goods prices are up 6.5 percent. Excluding food and energy, goods prices rose by 0.1 percent.
Services prices climbed 0.2 percent and are up 3.9 percent from a year ago. The increase was led by a 6.5 percent increase in portfolio management, a measure that rises when financial assets appreciate in value.
The index for transportation and warehousing prices fell 1.8 percent. Trade services, which measures the difference between what wholesalers and retailers pay for goods and their selling price, declined by 0.1 percent.
The producer price index measures the prices paid to American businesses for goods and services. It includes sales to consumers, households, businesses, and foreign purchasers, a broader array of customers than is measured by the consumer price index. Although it is sometimes referred to as a “wholesale” price index, it is not an index of wholesale prices. The headline figures, which come from the index for final demand, are based on sales of products to end-users rather than those that contribute to the manufacture or provision of other goods and services. It excludes import prices, since those are not paid to U.S. producers, but includes export prices, which are excluded from CPI.
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