US PPI remains unchanged in July, signaling easing wholesale inflation

Wholesale inflation in the United States remained subdued in July, coming in below economists' expectations and adding to evidence that price pressures may be easing after a surge earlier this year driven by tariffs and geopolitical tensions.

Data released by the Bureau of Labor Statistics on Wednesday showed the Producer Price Index (PPI), which measures prices received by producers for goods and services, was unchanged from the previous month.

Economists had expected a 0.2% increase, while June's reading was revised to a 0.1% decline.

The latest report follows a softer consumer inflation reading earlier this week and suggests inflationary pressures are moderating after accelerating in the first half of the year amid President Donald Trump's tariffs and the conflict involving Iran.

US stock futures edged higher, and Treasury yields fell following the data, with markets further reducing the likelihood of a September rate hike by the Federal Reserve.

Producer prices show easing cost pressures

Excluding the more volatile food and energy categories, core producer prices rose 0.2% in July from the previous month.

That was below economists' expectations of a 0.3% increase and slower than June's revised 0.4% gain.

On an annual basis, headline producer inflation eased to 4.7%, missing expectations of 4.9% and slowing from June's revised 5.5%.

Core producer inflation stood at 4.2%, slightly above the 4.1% forecast but lower than the previous month's 4.7%.

The data indicated that lower energy costs continued to help offset price increases in other areas of the economy.

“Net, net, pipeline pressures at the lower stages of production are not adding to the inflation risks the consumer faces,” said Chris Rupkey, chief economist at Fwdbonds, in a CNBC report.

“It counts as good news that for a second consecutive month, PPI final demand prices have not gone up, adding to the cost of living crisis faced by Americans.”

Goods prices fell 0.7% during the month, led by a 3.1% decline in energy prices.

Within that category, gasoline prices dropped 5.7%, while food prices fell 0.9%. Excluding food and energy, core goods prices edged up 0.1%.

Services prices increased 0.2%, largely reflecting a 6.5% jump in portfolio management costs, a category that often records sizable gains at the start of a quarter because of reporting practices.

Jobless claims remain historically low

Separate Labor Department data released on Thursday pointed to continued resilience in the labor market despite last month's surprise decline in payrolls.

Initial claims for state unemployment benefits rose by 9,000 to a seasonally adjusted 209,000 in the week ended Aug. 8. Economists polled by Reuters had expected 202,000 new claims.

Although claims increased modestly, they remain near the lower end of this year's range of 189,000 to 230,000, suggesting layoffs remain limited.

Continuing claims, which measure the number of people receiving unemployment benefits after their first week and serve as a gauge of hiring conditions, fell by 22,000 to 1.777 million in the week ended Aug. 1.

The latest claims figures come after government data last week showed nonfarm payrolls unexpectedly fell by 23,000 jobs in July, while employment gains for May and June were revised lower.

Economists have noted that payroll data often become more volatile during the summer because of seasonal adjustments linked to the end of the school year.

A separate survey by the National Federation of Independent Business also showed small business hiring improved in July after four consecutive monthly declines, adding to evidence that the labor market remains broadly stable.