US Producer Prices Hold Steady in July Amid Services Inflation

The US Producer Price Index (PPI) remained steady in July, with goods prices declining by 0.7% and services costs increasing by 0.2%. This flat reading follows a revised 0.1% drop in June's PPI. Economists had forecasted a 0.2% rebound after the previous month's decline.

The Bureau of Labor Statistics reported that the cost of producer goods fell, likely due to sharp oil price increases at the end of July not being reflected in the data. Meanwhile, services costs rose, suggesting inflation may remain elevated.

In the 12 months through July, the PPI increased by 4.7% after advancing 5.5% in June. The Federal Reserve tracks the Personal Consumption Expenditures price indexes for its 2% inflation target. With unexpected job losses and mild consumer inflation readings, the PPI report adds to the case for the Fed to keep interest rates unchanged at its September meeting.