Wholesale Inflation Comes in Under Expectations, Bolstering Fed Doves
The Bureau of Labor Statistics (BLS) released its wholesale inflation data for July, showing that prices remained flat on a month-over-month basis. This reading undershot expectations and comes after a June decline that was revised to be shallower than initially reported.
On an annual basis, the headline PPI index fell to 4.7%, which is cooler than consensus estimates. The goods gauge posted its second consecutive outsized decline, with energy prices plummeting by 3.1% in July from June.
The services side of the equation saw a modest 0.2% overall increase, driven by a large jump on the portfolio management index. However, the transportation and warehousing line fell for a second month, marking its first back-to-back decline since early 2025.
These figures have been welcomed by Federal Reserve doves as further evidence to support postponing an interest rate hike. The release comes after the encouraging CPI report last week, which saw traders trim September Fed hike odds to around 35%.