Wholesale Price Inflation Cools in July on Lower Gas Prices

The Labor Department’s producer price index, which measures inflation before it reaches consumers, rose 4.7% in July from a year ago, down from a 5.5% increase in June. This decrease in wholesale inflation is attributed to lower gas prices and cooling costs, signaling that consumer inflation could slow in the coming months. However, consumer prices have still outpaced wages for four months, and rising gas prices could push inflation higher in the next report. The producer price index for final demand was unchanged in July, with services advancing 0.2% and goods falling 0.7%. The decrease in wholesale inflation follows the government’s consumer price inflation report, which also showed a modest cooling last month. Despite this, gas prices rose in late July and early August, threatening to push inflation back up when August figures are reported next month.